Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENVIRONMENT

Council House Sales

Mr. Knox: To ask the Secretary of State for the Environment how many council houses have been sold to sitting tenants in England since May 1979.

The Secretary of State for the Environment (Mr. Michael Heseltine): Between April 1979 and June 1991 almost 1·3 million tenants bought their homes from English local authorities and new towns.

Mr. Knox: Does my right hon. Friend agree that that figure is a measure of the popularity of selling council houses? But should not more of the proceeds from such sales be devoted to building additional houses, particularly for the elderly and one-parent families?

Mr. Heseltine: I know of my hon. Friend's concern, which is shared by the Government. My hon. Friend will be pleased to know that the Housing Corporation's spending is set to rise from £1·1 billion in 1990–91 to more than £2 billion in 1993–94. Many of the people to whom he referred will gain from that.

Mr. Winnick: Why not take care to ensure that homes which have been sold off are replaced? Is not the Secretary of State concerned that nearly 7,000 families per month are losing their homes because they cannot keep up their mortgage repayments? Under the proposed scheme many such people will be unable to remain in their homes. Will the Secretary of State recognise at long last that there is an acute housing crisis in Britain? He talks about the number of dwellings that are sold off, but we want to ensure that people who are in such desperate plight can live in affordable rented accommodation.

Mr. Heseltine: The hon. Gentleman wants to keep people living in council houses, which they want to own, under Labour control for Labour party benefit. We were elected to pursue different policies and that is what we are doing.

Mr. Patrick Thompson: Will my right hon. Friend confirm that he will be visiting Norwich on 15 November? When he does so, will he take the opportunity to persuade Norwich city council to take a more imaginative approach not only to the sale of council houses but to provision for the homeless and to housing matters generally?

Mr. Heseltine: My hon. Friend is right that I shall be visiting Norwich and I confirm that it is part of a series of visits being paid by me and my ministerial colleagues responsible for housing so that we can talk face to face with local authorities about the housing that they provide. in the presence of representatives of their tenants' associations.

Mr. Trimble: The Secretary of State will agree that a great achievement of the current Administration has been the sale of many public authority dwellings to their tenants. In the light of that, will he suggest to the Secretary of State for Northern Ireland that it would be a retrograde step for him to repeal the right-to-buy legislation in Northern Ireland, as he proposes?

Mr. Heseltine: I am glad that the hon. Gentleman so admires our foresight in introducing the right-to-buy legislation in the early years of the present Administration. My right hon. Friend the Secretary of State for Northern Ireland is a man of great wisdom and he will make the appropriate judgments with regard to Northern Ireland which I shall support.

Planning

Mr. Favell: To ask the Secretary of State for the Environment if he will make a statement on the role of the European Commission in the planning process.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tim Yeo): A number of Community measures affect the planning process, including in particular the directive on environmental assessment. The Commission has the duty to ensure that member states properly apply Community law and it is in this connection that they have recently initiated infraction proceedings against the United Kingdom on the environmental assessment directive. We will provide a full response to its complaint, but are confident that our implementation of the directive is fundamentally sound.

Mr. Favell: The A6, which runs through the middle of Stockport, causes untold misery to my constituents, who have been waiting for a bypass for many years. They are now told that the bypass is likely to be delayed by the Commission. Does my hon. Friend agree that, like the channel tunnel rail link, this is a nook and cranny into which the Commission should not poke?

Mr. Yeo: I entirely understand my hon. Friend's concern. The Commission's role is clearly confined to ensuring that environmental procedures are properly followed. Decisions about the merits of any individual case remain a matter for the appropriate United Kingdom authority—and that is how we intend to keep it. I sympathise with my hon. Friend because the bypass to which he refers was first proposed in the 1970s. In my view, the lengthy delay reflects how careful we are in this country properly to examine any major planning scheme.

Mr. Simon Hughes: May we have less humbug from the Government about environmental impact assessment directives? Was not the project commended to a Committee by the present Secretary of State for Health, when he was a Minister of State in the Department of the Environment? Did not the European Commission alert the Government in January and then write to the Government


on 24 March? Therefore, when the Prime Minister said in Harare, "We had no prior knowledge of it and the facts were not discussed with us," was not it simply untrue?

Mr. Yeo: When it comes to humbug, we cannot compete with the hon. Gentleman and his party. No notice was given by the Commissioner of his strenuous efforts to obtain extensive publicity for his letter on 16 October. No warning was given at all. The fact that such strenuous efforts to obtain publicity were made by Commissioner Ripa di Meana suggests that he was more concerned with publicity and propaganda than with protecting the environment.

Mr. Dykes: Did not the Commissioner behave irresponsibly in releasing his press release himself, rather than through the Commission's normal channels, after receiving the approval of the presidency and other Commissioners? Does not that situation illustrate the advantages of majority voting? There was a unanimous vote for the directive, including by the British Government, whereas if there had been proper majority voting, we could have organised a lobby of all member states to outvote it.

Mr. Yeo: My hon. Friend is right to draw attention to the manner in which Commissioner Ripa di Meana issued his press release. That was the subject of a letter from my right hon. Friend the Prime Minister to Mr. Delors, who acknowledged in his reply the sensitivity of the issue. The British Government's record on the directive is outstandingly good. We were the third-fastest country to implement it and we have the fourth-best record of compliance with European legislation in the entire Community.

Mrs. Ann Taylor: With regard to the notice given by the Commission of its action, has the Minister read Hansard for 12 July, when I and my hon. Friends raised the question with the Minister for the Environment and Countryside? We recognise and appreciate the Under-Secretary of State's comment that the Commissioner's powers are confined to ensuring that procedures are followed. Will he therefore dissociate himself from the Foreign Secretary's remark that the Commissioner is trying to dictate through which field a road should run?

Mr. Yeo: The House knows full well that the Labour party has totally reversed its attitude to the Community on no fewer than five occasions over the past 30 years. On past form, we are due for another U-turn in the early 1990s. The hon. Lady's frantic attempts to suck up to Brussels on all occasions, regardless of how far the British people are pushed around, are unlikely to cut any ice with the Commission, but will certainly be noticed by the people who believe that British authorities should determine the merits of individual planning applications in this country.

Mr. Jessel: Is not it intolerable that foreign officials should decide either on the procedure to be followed with or the merits of British planning applications?

Mr. Yeo: It is no part of the British Government's policy to allow any foreign officials to decide the merits of planning cases in this country.

Methane Sites

Mr. Vaz: To ask the Secretary of State for the Environment if he will make a statement on Government plans to assist local authorities that discover methane sites in their areas.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): The Government have set aside £28 million in the current financial year for allocation as supplementary credit approvals to local authorities carrying out gas control projects at closed landfill sites.

Mr. Vaz: I thank the Minister for the positive response of the Minister for the Environment and Countryside at a meeting at the Department yesterday afternoon, at which the Government gave Leicester city council permission to borrow £25,000 to survey the Appleton Park site in Rochney Mead. That will come as a comfort to local residents. Can the Minister give an assurance that the council will receive an equally favourable response next February, when it may ask for permission to borrow £400,000 to secure the site?

Mr. Baldry: I am grateful to the hon. Gentleman for his thanks.
The cost of subsequent remedial works will, of course, be eligible for supplementary credit approval. As was made clear by my hon. Friend the Minister for the Environment and Countryside, we shall consider such an application once the cost has been determined following the present survey.

Local Government Finance

Sir John Farr: To ask the Secretary of State for the Environment what proposals he has to include the banding of property values in assessing new methods of local government financing.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): Our proposals for eight bands of property values are set out in the Local Government Finance Bill.

Sir John Farr: When making his assessments and calculations and increasing local government taxes, will my hon. Friend bear in mind the fact that those who live in larger properties are not necessarily able to pay more than people who live in much more modest surroundings?

Mr. Portillo: An integral part of our arrangements is, of course, limiting the tax ratio, so that people living in more expensive properties pay more than those in cheaper properties, but not too much more. The maximum that can be paid in the most expensive property in a given area will be three times the amount paid in the cheapest. That is in marked contrast to Labour's proposals: Labour wants to return to an "envy tax", forcing those living in more expensive properties to pay exorbitant amounts. That is what happened under the rates.

Mr. Salmond: Can the Minister confirm that my calculations are correct? Under the banding proposals for the new council tax, is the Secretary of State for the Environment likely to pay about £270 for his central London accommodation? That is rather less than the


amount likely to be paid by a young couple of first-time buyers in Aberdeen, who will probably pay £280 for a £35,000 house or flat.
If those calculations are correct, will the Minister ask the Secretary of State whether he mentioned them in his speech yesterday evening in Aberdeen?

Mr. Portillo: People who live in local authorities that spend prudently will have lower council tax bills than those who live in authorities that spend less prudently. If my right hon. Friend has a residence in Westminster, he is likely to benefit from the low-spending policies of that excellent council, under the community charge, council tax or any other system.

Dame Elaine Kellett-Bowman: Will my hon. Friend bear in mind the problems created for tenants, forestry workers, estate workers or clergymen who live in tied houses that are bigger than the houses that they would normally be able to afford and whose incomes are not reflected in their banding? This is a serious matter and I ask my hon. Friend to take note of it.

Mr. Portillo: I appreciate what my hon. Friend said. I have a feeling that we shall have considerable discussion about such issues when we debate the Local Government Finance Bill in Committee. That is one reason why I am so keen for the time for discussion to be allocated sensibly, allowing all such serious matters to be discussed fully.

Beaches

Mr. Ieuan Wyn Jones: To ask the Secretary of State for the Environment what progress is being made towards achieving EC directives on cleaning up beaches by 1992.

Mr. Baldry: The £2 billion programme of improvements for bathing waters identified under the directive is on target to bring virtually all bathing waters into compliance by 1995.

Mr. Jones: As the seaside holiday season is so short, does the Minister agree that, in view of the quality of many of our beaches, the work must be done quickly in time for the next holiday season? Is not it time that the Government took the lead? A vast amount of resources is required to clean up our beaches and much of the work is done by privatised water companies, local authorities and volunteers.

Mr. Baldry: As I have made clear, a substantial sum is being invested by the water companies. About £2 billion is being spent on improvements to ensure that our beaches are brought into compliance with the directive as soon as is humanly possible.

Mr. Michael Brown: Will my hon. Friend note that, contrary to what the hon. Gentleman has just said, only last week the Anglian water authority launched a massive investment programme for the specific purpose of cleaning up the whole of Cleethorpes beach, thus ensuring that Cleethorpes can go forward as a tourist centre worthy of its name?

Mr. Baldry: My hon. Friend is absolutely right. Every water company with coastal waters is spending millions upon millions of pounds on ensuring that all our bathing waters comply with the directive as soon as is humanly possible.

Mr. Gareth Wardell: The Minister knows that there are two compliance standards under the European Community directive: one, for total coliforms, is 10,000 per 100 ml of water; the other, for E Coli, is 2,000 per 100 ml of water. According to the latest information for summer 1990, the figure for the bathing beach at Aldingham near Barrow-in-Furness was, for the filthiest sample, over 1,600,000 E Coli per 100 ml of water and, for the same beach, over 1,800,000 total coliforms. Does the Minister bathe there often?

Mr. Baldry: The method for testing bathing water here is exactly the same as the Commission uses to assess compliance in all member states. The method that we use to test water was fully supported in recent reports by the National Rivers Authority and the Select Committee on the Environment. We have the most comprehensive sampling regime in Europe and look at bathing water quality throughout the year.

Mr. John Marshall: Will my hon. Friend confirm that the level of investment by the water industry, now that it has been privatised, is very much greater than when it was under public ownership? Does my hon. Friend agree that it is hypocritical of Opposition Members to call for more investment without saying how they would pay for it?

Mr. Baldry: Yes, Sir. It is worth recalling that the Labour party so mismanaged the economy that at the behest of the International Monetary Fund it had to slash, overnight, investment in the water industry.

Mr. Win Griffiths: Will the Minister admit that the privatised water companies are diverting the funds that they have available into buying hotels and waste companies instead of speeding up the implementation of the directive? The construction industry is in such a bad shape that there are plenty of opportunities for speeding up the programme to clean our beaches. Is not it important to make sure that annex 5 of the international convention on the prevention of pollution from ships is properly policed—in British waters at least?

Mr. Baldry: I am not confident that the Opposition understand the concept of £2 billion. Millions of pounds are being spent by the water companies. To take only a 40-mile section of the Yorkshire coastline, £30 million is being spent at Scarborough, £15 million at Filey, £9 million at Sandsend and £6 million at Robin Hood's bay. Millions of pounds are being spent to enhance and improve water quality and to ensure that our bathing waters comply with the European Community directive as soon as is humanly possible. The expenditure of a sum of money as large as £2 billion would not have been possible under a state-controlled nationalised industry.

Housing Association Tenants

Mr. Bowis: To ask the Secretary of State for the Environment what steps he is taking to enable housing association tenants to own their own home.

Mr. Heseltine: Secure tenants of housing associations normally have the right to buy, unless their landlord is a charity or a fully mutual co-operative. Housing associations, including charities, can also give grants under the Housing Corporation's tenants incentive scheme to


help tenants move out and buy a home of their own, thereby releasing vacancies for reletting to homeless families.
The Government are discussing with the Housing Corporation the introduction of a programme of do-it-yourself shared ownership, under which tenants would find property on the open market which they would then buy jointly with a housing association. This scheme would be targeted on existing tenants in order to release property for reletting to the homeless.

Mr. Bowis: Although that is welcomed in most parts of the country, does my right hon. Friend agree that, because of property prices in London, it is difficult for people to move to other properties within the area? Palms would be laid before his feet if he came to Battersea in the near future with the keys of home ownership for housing association tenants under the right-to-buy scheme—something which they were promised in an earlier Parliament, but which was delayed by an unholy alliance in another place. Will my right hon. Friend look again at that possibility, particularly for London?

Mr. Heseltine: My hon. Friend realises that there was a formidable political dialogue about that issue and we have no plans to reopen it now. I am always pleased to receive invitations to visit Battersea and I think that I have always accepted them.

Mr. Fearn: Following the Minister's comments in the House on 12 July about commonhold, will he say whether his right-to-buy policy will be extended to long leaseholders who, at present, are not covered by legislation?

Mr. Heseltine: As the hon. Gentleman will know, I have no further announcements to add to my statement on commonhold. I have clarified the position on housing association tenants in the terms of the consultation to which I referred today.

Sir Anthony Grant: In addition to housing association tenants, will my right hon. Friend consider the position of tenants of Crown estates, many of whom have lived in their houses and taken great care of them for many years? Is not it only fair that they should have the same rights as tenants of council houses?

Mr. Heseltine: I cannot promise my hon. Friend that we will extend the rights to cover that area. I shall look at the matter again in view of my hon. Friend's interest, but I would not wish to give any further commitment.

Local Government

Mr. Watts: To ask the Secretary of State for the Environment how many of those responding to the local government structure review favoured an increased number of unitary authorities.

Mr. Portillo: Of those who commented directly on the principle of moving to a single tier of local council, the vast majority expressed support for it.

Mr. Watts: What representations has my hon. Friend received from Slough? Is he aware of the strong cross-party support in Slough for the abolition of Berkshire county council and its replacement by unitary authorities based on existing boroughs and districts?

Mr. Portillo: We received a representation from Slough. As my hon. Friend says, it made the case for unitary authorities in general and for that solution to be applied in Slough. My hon. Friend will be pleased that we propose to set up a local government commission so that such views can be considered seriously in due course.

Mr. Hardy: Ministers and hon. Members on both sides of the House have expressed support for unitary authorities and the term is now used frequently. Does the Minister realise that it causes a great deal of anxiety among members of parish, town and similar authorities? What is the Government's attitude to parish councils and so on, which have had to put up with a fair amount of inadequate concern from Her Majesty's Government in recent years?

Mr. Portillo: My hon. Friend the Under-Secretary of State recently addressed a conference of town councils. The Government have not neglected them by any means and we think that parishes have an important role. The concept of unitary authorities is in no sense meant to detract from the good work that the parishes do.

Mr. Cran: My hon. Friend will understand the enthusiasm of my constituents for a return to a single-tier, all-purpose local authority based on the borough of Beverley. To do so, we have to get rid of Humberside county council. Will my hon. Friend clarify the statement that he made yesterday and tell the House whether Humberside will be the first local authority to be considered by the new local government commission, or whether it will be among the first? If it is the latter, what does that mean?

Mr. Portillo: It means precisely that Humberside will be in the first batch of authorities that we will recommend for consideration by the local government commission. To clarify that a little more, it means that the local government commission will have a regional structure. It will be able to consider more than one place at a time and I believe that Humberside should be one of the areas in the first batch. It will be one of the first places to be considered. I hope that that makes the position clear to my hon. Friend.

Mr. Gould: Why have the Minister and the Secretary of State in their Local Government Bill passed up the chance of proceeding on the basis of consensus? The Opposition would support a local government commission and we support the idea of flexibility to meet local needs. Why, therefore, are the Government insisting on a process that is apparently piecemeal, long-drawn-out and manifestly open to political gerrymandering? Are they serious about putting local government through the further chaos of creeping restructuring, which can only add to the confusion already felt by so many in local government about who does what? Have not they already done enough damage to local government without this further turn of the screw?

Mr. Portillo: As usual, the confusion is in the hon. Gentleman's mind. Our consultation document, which the hon. Gentleman welcomed when it was issued, was perfectly clear and the Bill that we have published is in line with it. I am unaware of any response from the hon. Gentleman, because he does not wish to consult the


Government. His remarks are wholly inconsistent not only with what he said before but with what his colleagues in another place are saying.

Mr. Latham: Is my hon. Friend aware that, after their constructive meeting with my hon. Friend the Member for Salisbury (Mr. Key), my constituents are optimistic that they will have Rutland back as a unitary authority under the re-elected Conservative Government?

Mr. Portillo: After meetings with my hon. Friend the Under-Secretary most people are pleased, because of his renowned courtesy. It was important that we set out that the guiding principle of the local government commission should be to establish the proper services to be provided to local people, in line with their sense of local community—the sort of community with which they wish to identify. That is a welcome concept and I believe that, despite what the hon. Member for Dagenham (Mr. Gould) said, it will be greeted warmly throughout the House.

Compulsory Competitive Tendering

Ms. Primarolo: To ask the Secretary of State for the Environment when he expects the extension of compulsory competitive tendering to come into effect.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): Our consultation paper, "Competing for Quality: Competition in the Provision of Local Services", which was published yesterday, proposes that compulsory competitive tendering should be extended to a range of local authority services, and should come into effect at different dates from late-1992 onwards.

Ms. Primarolo: Is the Minister aware that, for hundreds of thousands of women who work in local authorities, compulsory competitive tendering has meant that their pay has been cut, their hours lengthened and their terms and conditions considerably weakened? Given the Prime Minister's commitment to the cause of women's equality, will the Minister give an undertaking that compulsory competitive tendering will be cancelled as a gesture towards improving women's pay and conditions of work?

Mr. Key: Compulsory competitive tendering is non-discriminatory and I have no intention of going down that path. I reassure the hon. Lady that the value for money that is emerging has nothing to do with sex.

Mr. Squire: Will my hon. Friend confirm that, contrary to the views expressed by the hon. Member for Bristol, South (Ms. Primarolo), his independent review of the operation of CCT included statements from the chief executive of a Labour authority that compulsory competitive tendering had created a much more efficient and slimmer organisation and had highlighted inefficiencies that it had not previously seen? Is not the real answer that on this issue, as on so many others, the Labour party is in thrall to the public sector trade unions?

Mr. Key: Yes, I could not have put it better myself.

Mr. O'Brien: The report published by the Department of the Environment, to which the hon. Member for Hornchurch (Mr. Squire) referred, giving the findings of the Institute of Local Government Studies at Birmingham university on the first year of competitive tendering in local government only adds to the confusion that the

Government have created about the role of local government in providing services to poll tax payers. There is no reference in the report to the quality of services to be provided under the competitive tendering procedure. Is not it time that the Government stopped messing about with the provision of local government services and delayed any further introduction of compulsory competitive tendering until the procedures and the quality of services have been resolved?

Mr. Key: No. It is astonishing that the hon. Gentleman insists on looking backwards whenever we have questions in the House. The report has informed the Government's policies and if he would be so kind as to read the consultation paper, which we issued only yesterday, he would find that a quality threshold is specifically included in the extension of CCT to services such as architecture.

Mr. Summerson: While my hon. Friend is doing his best to persuade Labour councils of the virtues of competitive tendering will he point out to them that the provision of services to community charge payers is for the benefit of the entire local community and that it is not merely to provide a multiplicity of overblown, unproductive jobs in town halls?

Mr. Key: Yes, that is entirely the point. One of the advantages that Ministers gain in visiting a large number of local authorities of all shades of political opinion across the country is to learn of the unanimity of opinion that compulsory competitive tendering is good for the charge payers and for the recipients of services and that it is also good for the career structures of many of the jobs that go with it. It would be retrograde to go back on that.

Local Government Finance

Mrs. Mahon: To ask the Secretary of State for the Environment if he has any plans to visit Halifax to discuss local government funding.

Mr. Portillo: I regret that my right hon. Friend the Secretary of State has no such plans, but I am sure that Ministers will wish to visit Halifax in force over the coming months.

Mrs. Mahon: Will the Minister join me in congratulating Labour-controlled Calderdale council, which was named recently in a report of the Chartered Institute of Public Finance and Accountancy as the second most efficient metropolitan council? Does not he think that that is a remarkable achievement as its standard spending assessment has, for some reason, been set lower than the metropolitan or national average? Does the Minister think that that is a good way to repay an efficient council which, if the same criteria are used this year for the SSA, will face £7 million of cuts? Is it not time that he abolished poll tax capping and allowed councils to get on with the job?

Mr. Portillo: I always find it puzzling, when the Government increase the standard spending assessments markedly year by year, to hear that that leads to cuts by local authorities. Calderdale's SSA increased by 18 per cent. last year. We do not yet have the figures for next year, but we know that the average increase in total standard spending will be 7·2 per cent. As the Government have increased the money ahead of inflation, I find such talk of cuts rather tiresome.

Mr. Batiste: When my hon. Friend takes the opportunity to visit Halifax to discuss local government funding, will he consider the future of the joint committees in West Yorkshire which were established following the abolition of the West Yorkshire metropolitan county council? Will he consider especially the police authority and the growing concern in West Yorkshire that there must be better ways to fund that important service?

Mr. Portillo: My hon. Friend raises important matters. However, he will know that in the Local Government Finance Bill which we published yesterday we have bitten off a considerable amount of possible change with the establishment of the local government commission. I think that the matters that we have laid—or intend to lay—before the commission are already sufficient and I think that some of my hon. Friend's concerns may have to wait for another day.

Northumberland County Council

Mr. Amos: To ask the Secretary of State for the Environment what representations he has received on the future of Northumberland council council.

Mr. Heseltine: Six principal local authorities and one other organisation from Northumberland responded to the consultation paper "The Structure of Local Government in England". Of these, four commented on the structure of local government in Northumberland, including the role of Northumberland county council. The other three responses were general comments on our proposals.

Mr. Amos: As all colleges and most schools will soon be free from local authority control, as more services will be put out to contract and as organisations such as Newcastle airport will be put into the private sector, where they properly belong, does my right hon. Friend agree—and I am sure that he will, because he is a reasonable man—that Northumberland needs a unitary authority, especially as Labour-controlled Northumberland county council constantly says that it does not have enough money to decorate schools but recently managed to find one third of a million pounds to give its senior officers a double figure salary increase and company cars?

Mr. Heseltine: I know that my hon. Friend will put those points with his customary eloquence to the local government commission that we are about to set up and that he will welcome the fact that we have set it up so that he is able to do so.

Mr. Bellotti: rose——

Mr. Speaker: Order. Northumberland is a long way from Eastbourne, but let us see what the hon. Gentleman can do.

Mr. Bellotti: Will the Secretary of State assure us that new structures for local government in East Sussex and in Polegate and Willingdon in particular, will not be imposed on local communities against their wishes. Also, if local communities do not like the results of the local government commission, will he consider local referendums? If not, what will he propose?

Mr. Heseltine: The hon. Gentleman will know that one of the objectives of our local government commission is to

consult local communities deeply and widely. It is designed to attract a structure of local government which is based on local loyalties and which reflects community interests. It is important that the House should have a chance to consider those matters, and the legislation that will come to us from another place will provide precisely that opportunity.

Housing Associations

Mr. Moate: To ask the Secretary of State for the Environment how many local authorities have now transferred their housing stock to housing associations; and what steps he is taking to encourage such transfers.

Mr. Yeo: During the past two years, 16 local authorities have transferred their stock of more than 76,000 properties to housing associations, with the approval of their tenants. Two more proposed tranfers, at Bromley and at Tunbridge Wells, have been supported by tenant ballots and many more local authorities are known to be considering this option.

Mr. Moate: Is my hon. Friend aware that in my constituency the borough of Swale has transferred its whole housing stock to the Swale housing association, involving £55 million of assets? With all-party co-operation, the transfer is working extremely well and there is a high degree of tenant involvement. Does my hon. Friend agree that we should look forward to the time, very soon, when all local authorities arrange such transfers and generally move out of direct housing management?

Mr. Yeo: My hon. Friend rightly draws attention to the enormous benefits that accrue from such large-scale voluntary transfers. There are benefits to the tenants in the form of improved stock condition, better repair services and guarantees on rents. The research that we have carried out on the early transfers shows that tenants feel that their landlords are taking a closer interest in them. If only the Labour party was not so slavish in its attachment to the out-of-date idea of councils as monopoly landlords, tenants in Labour-controlled local authorities might also be able to enjoy those benefits.

Mr. Steinberg: Does the Minister agree that the transfer of council houses to housing associations will not solve the housing crisis? My district council, Durham City, has sold 3,000 houses under the right-to-buy scheme and we have 4,000 people on the waiting list. When will the Government lose their dogmatic policy and allow councils to build new houses so that people from those lists can be housed? So many people want rented accommodation provided by local authorities.

Mr. Yeo: It is clear that it is the Labour party which has dogmatic policies, as it sees the local authority as the only answer to housing provision and it refuses to learn the lesson of Southwark, of Lambeth and of Hackney, where tenants are suffering from exactly that policy. The whole purpose of getting local authorities to sell houses is not only to allow the tenants the chance to enjoy the security of owner-occupation, but to be able to reuse the capital receipts in areas in which they are most needed. We redirect the borrowing power to those areas in which the housing need is greatest. The Labour party's proposals would not produce any more cash, because, as fast as the Front-Bench spokesmen go round the country whispering


to any pressure group that is willing to listen that Labour will spend a bit more cash, their colleague, the hon. Member for Derby, South (Mrs. Beckett), rushes down to the City to say that that is exactly what Labour will not do.

Sir Michael Neubert: Will my hon. Friend confirm that of the £162 million available to councils as a proportion of the receipts from the sale of houses to housing associations, less than half has been reapplied to housing? Would not it be a good thing for more of that money to be directed towards housing, especially towards the upgrading of existing housing stock, which would give a much-needed boost to the building industry?

Mr. Yeo: My hon. Friend is right to say that £75 million out of the available £160 million received from the large-scale voluntary transfers has been directed towards housing. It is entirely for the local authorities to decide how they will use the capital receipts. I should be reluctant to take even greater centralising powers to direct or force them to spend the money on housing stock. However, I have no doubt that in the areas in which housing need is considerable, my hon. Friend and other hon. Friends will talk to local authorities and try to influence the way in which they spend the money, in accordance with local need.

Bolsover Coalite

Mr. Skinner: To ask the Secretary of State for the Environment whether he will ensure that an environmental study is carried out in the area around Bolsover Coalite; and if he will make a statement.

Mr. Baldry: Her Majesty's inspectorate of pollution has investigated emissions from the chemical incinerator at the Coalite works. Extensive studies are continuing. HMIP's investigations have shown that dioxins are present in the stack gases from the Coalite incinerator. Concentrations measured in the current emissions would probably account for only a part of the dioxins that have been found in the milk on the affected farms. The company is not in breach of the law in the manner in which it has operated the incinerator. The company is undertaking an urgent review of the incinerator design and will incorporate substantial modifications so as to meet the latest stringent standards. The modified incinerator will be capable of operation with minimal emissions of dioxins. The management has agreed that in order to commence the programme of engineering work, the incinerator will be shut down at the end of November. I shall write to the hon. Member once decisions on further work have been taken.

Mr. Skinner: Now that the Minister has half admitted that there is a direct correlation between Bolsover Coalite, dioxin and the contaminated milk, does he accept that it has taken six months' probing to get someone at the Dispatch Box to contribute even that little bit to the argument? Will he now consult the Secretary of State, the Ministry of Agriculture, Fisheries and Food and all the other relevant Departments to ensure that there is a proper environmental assessment and a public inquiry into the link between Coalite and the dioxin-contaminated milk? If there is to be any more waffle about the citizens charter, it is high time that the Government did something about this issue in Bolsover.

Mr. Baldry: The hon. Gentleman is wrong to seek to draw those inferences from the information that I have given. His comments are also less than fair; extensive studies, including environmental studies, have been carried out. Those involve the Ministry of Agriculture, Fisheries and Food, which has been carrying out work at the affected farms, the National Rivers Authority, which has measured dioxin levels in fresh-water sediments from the area, and HMIP, which has investigated the emissions from the chemical incinerator at the Coalite works. Many agencies have sought to obtain as much information as possible, but it will be some time before the full results of the investigations at the farms are available. However, results will be published in the normal way, and I assure the hon. Gentleman that they will be made public.

Compulsory Competitive Tendering

Mr. Lofthouse: To ask the Secretary of State for the Environment what evidence his Department has acquired on the impact of the extension of compulsory competitive tendering on the quality of local authority services.

Mr. Heseltine: We have published our proposals for extending compulsory competitive tendering to professional and other services in our consultation paper, "Competing for Quality: Competition in the Provision of Local Services". Our consideration of policy has been informed by research into the effects of the Local Government Act 1988 carried out by the Institute of Local Government Studies, and by a study of relevant local authority experience carried out by PA Consulting Group.

Mr. Lofthouse: Will the Secretary of State confirm that there is evidence of deterioration in the quality of services? Will he confirm that some schools have had to close because of a lack of cleanliness, and that some contractors who bid low in order to defeat local authority tenders have had to pull out half way through the contract and let the local authority pick up the mess?

Mr. Heseltine: Obviously, we are concerned to ensure that any infringements of safety standards or standards of health affected in such matters are carefully considered. If the hon. Gentleman would give me specific examples, of course I should treat them seriously.

Mr. Dickens: Will my right hon. Friend tell the House truthfully whether, if his house needed painting, he would rather have the local council direct labour force or a private contractor paint it? We all know the answer. Why should the Opposition wish to inflict second best on their council tenants?

Mr. Heseltine: I am a Tory; how could I tell I lie? If I wanted to have my house painted—every so often, like everybody else, I do—I should get competitive prices. I know that in doing so I should get the work well done and at the lowest possible price. If Labour authorities would understand that, we should get better value for money out of local government.

Poll Tax

Mr. Cohen: To ask the Secretary of State for the Environment what recent representations he has received for funds for local authorities to allay costs associated with the poll tax.

Mr. Portillo: We have received a number of representations from local authorities.

Mr. Cohen: Has the Minister looked up the statement made by the Secretary of State on 21 March? According to column 403 of the Hansard report, the right hon. Gentleman said that the Government would pay grants to local authorities which had lost income in collecting the poll tax, and would
cover authorities' additional administrative expenses".
In the case of my local authority, that would amount to about £14 million—it has cost other local authorities millions of pounds, too. When I wrote to his ministerial colleague I was told that the Minister did not even know that such funds were available. Will the Government now pay up to the local authorities?

Mr. Portillo: The hon. Gentleman misquotes from the column in question. What my right hon. Friend said was that we would
pay grant for the administrative expenses arising as a consequence of the Bill"—[Official Report, 21 March 1991; Vol. 188, c. 403.]
He was talking about the Bill that brought about the £140 reduction in the community charge. We are paying grant both in respect of the income forgone because of the £140 reduction and in respect of administrative expenses incurred by authorities that had already sent out bills—authorities that had to send bills out twice. We are paying Waltham Forest money under the first heading. We have not yet had a claim for it in respect of its administrative expenses, but if it cares to send one in, we shall consider it.

Mr. Ron Brown: The Government wrote off debts in excess of £15 billion when the public utilities were privatised. Is not it a bit odd, therefore, that, according to them, an amnesty cannot be granted to those who clearly cannot afford to pay this tax, which benefits the rich at the expense of the poor? If the Prime Minister can go to the third world—and the Minister must always remember that we have a third world in this country—and talk about writing off its overall debts, which I applaud, surely the debts of those in this country who are suffering unnecessarily because of a tax imposed upon them against their will can also be written off.

Mr. Portillo: The hon. Gentleman should have declared an interest in calling for an amnesty, as I believe that he is one of those who refuse to pay community charge. I welcome this opportunity to say that there will be no amnesty for those who have not paid their community charge—even though some of them have been so badly misled by those whom they elected to the House.

Mr. Gould: Is not it clear that the greatest burden on local councils in respect of the poll tax is the 20 per cent. contribution rule—a point made forcefully, as the Minister will know, by the Audit Commission and by virtually the whole of local government? The Government have recognised that that rule was a mistake, as they have demonstrated by doing away with it for the council tax. Why will they not act on the same principle for the poll tax? Why do they insist that, by virtue of that rule, local authorities spend money that they have no hope of recouping and issue more than 7·5 million summonses in what is rapidly becoming the biggest debt collection exercise in the history of the world?

Mr. Portillo: When we introduce a new system of taxation—which we hope to do with the co-operation of the Labour party, although we are not sure about that—we shall introduce a new system of rebates, but as long as we have the community charge, and as long as social security benefits are uprated by sums appreciably above the average amount of the 20 per cent. that people have to pay, it is right that those people should pay and that local authorities should take enforcement action. The hon. Gentleman would have done better in his question to condemn his colleagues who have been urging nonpayment and to make it clear where the Labour party stands on that issue.

Repossessed Homes

Mr. Burns: To ask the Secretary of State for the Environment what representations he has received concerning the standard community charge for repossessed homes in 1990–91; and if he will make a statement.

Mr. Key: We received a number of representations following the introduction of the community charge and, as a result, we created an additional statutory class of property so that no standard charge could be levied on a repossessed home. This took effect from last April.

Mr. Burns: I thank my hon. Friend for that reply and congratulate him on making what was obviously the correct decision. But may I draw to his attention the problems facing those whose houses were unfortunately repossessed in the financial year prior to April 1991, many of whom now face community charge bills amounting to twice the personal community charge? As local authorities cannot now change that, will my hon. Friend's Department examine the problem and help people who would have been exempt had their houses been repossessed this year rather than last and who would thus not have faced a financial burden on top of the misery of repossession?

Mr. Key: We have looked at the matter carefully, and I am sorry to say that I cannot give my hon. Friend much hope, although I pay tribute to him for the assiduous way in which he has looked after his constituents' interests. We have had copious correspondence about Mr. and Mrs. Pegrum in his constituency. We have now changed the arrangements. Of course, until last year, Chelmsford was a Liberal-controlled authority. I am glad that the Liberals are no longer in control. We trusted local authorities to be serious and sensible, but they were not. That must have been one of the things that caused the electors in my hon. Friend's constituency to chuck them out.

Mr. Tony Banks: Is the Minister aware that there could be 100,000 repossessions of houses this year? Is he aware of the suffering and misery that that means for many people, which, in many respects, is caused by the Government's economic policies? What monitoring is the Department of the Environment carrying out in respect of repossessions? What additional resources are being made available to local authorities which have to rehouse people whose houses have been repossessed by the building societies? What discussions are taking place between Government Departments, the banks and building societies to see what can be done to alleviate the suffering?

Mr. Key: My hon. Friend the Minister of State has had detailed discussions with the Council of Mortgage Lenders and recently announced his new initiative with the council with regard to repossessed properties being passed to housing associations for temporary letting to homeless families nominated by the local authorities. That brings empty properties back into use and provides homes for families. It also restores confidence in the market. Incidentally, it also means that the balance of rental income after the administrative costs to the housing association goes back to the lender and that helps to keep the defaulter's debt down as well.

Council Tax

Mr. McAllion: To ask the Secretary of State for the Environment what discussions he has had with the computer industry concerning the implementation of the proposed new council tax.

Mr. Key: The Department has had preliminary discussions with major suppliers and has commissioned a study of the feasibility and desirability of a national software specification. Now that the Local Government Finance Bill has been published, we will be discussing the computing aspects in detail with all interested parties.

Mr. McAllion: As the computer industry, council finance officers and many other non-partisan critics are sending the same messages to the Minister and to the Government that the new tax is ill-prepared, the timetable for its introduction is too tight, it will require a poll tax-type register and will be even more risky and difficult to introduce than the poll tax, why do not the Government for once follow a sensible course and scrap the poll tax, abandon their proposals for the new tax and leave it to the next Parliament and a Labour Government to introduce a fairer rates system?

Mr. Key: The hon. Gentleman is not only scaremongering, he is wrong. Sadly, not all those involved are unanimous in their approach. Some organisations, including the local authority associations, do not want a national specification and that does not make it easy. However, I can offer some reassurance to the House, because we hope that we will have some of the regulations in draft by Christmas. We will discuss the regulations and the Bill with the local authority associations tomorrow.

Local Government Finance

Mr. Robert B. Jones: To ask the Secretary of State for the Environment whether it his intention to continue to take firm measures next year to protect local taxpayers from overspending by local authorities.

Mr. Portillo: Yes. We intend shortly to announce for 1992–93 provisional capping criteria which will be in a similar format to the criteria adopted for 1991–92.

Mr. Jones: I thank my hon. Friend for that answer. However, is he aware that when a finance system is changed, it results not simply in the headline-grabbing activities of a few local authorities, but in excessive spending by many local authorities? Therefore, if he wants to ensure that the people of this country receive value for

money for their local authority contributions, those controls should apply throughout the country and not just to the extremes.

Mr. Portillo: I entirely agree with my hon. Friend. When the community charge was introduced, many local authorities took the opportunity in the upheaval to increase their spending. I am determined that, when we change the system again, no such opportunity will be provided.

Mr. Loyden: Will the Minister end the rhetoric about local government and begin to address the real problems in our towns and cities which, since the Government came to power, have experienced a reduction in spending to a point at which they are now compelled to sell off the heritage of the people of those cities and towns? When will the Government realise that they are presiding over the downfall of our towns and cities?

Mr. Portillo: The future of Liverpool—if that is what the hon. Gentleman is referring to—is now in rather better hands after some of his friends from the Labour party lost control of Liverpool city council. The prospects for Liverpool have been vastly increased by the City Challenge announced by my right hon. Friend which, I am pleased to say, Liverpool has embraced with enthusiasm.

Mr. Butler: What protection will my hon. Friend offer to local taxpayers of councils such as Warrington and Halton which award themselves contracts far in excess of private sector tenders?

Mr. Portillo: The measures that we announced yesterday in the Local Government Bill and in the consultation document that we issued at the same time show our determination to extend compulsory competitive tendering and to make sure that there is a more level playing field so that there will be fair play between direct service organisations and outside contractors bidding for local authority work. I hope that that is reassuring to my hon. Friend.

Mr. Blunkett: Given that the year-on-year increase in central funding for local authorities next year is only 4·7 per cent., and given that the Chancellor is going to announce nothing this afternoon for the education of children in schools or the care of the elderly, children or the disabled in social services, does the Minister agree with the Secretary of State's comment on Radio 4 on 20 October that there are no cuts in local authority services and will be no cuts next year? Does the Minister agree that the Secretary of State knows perfectly well that there are cuts and will be cuts and therefore is a knave, or is he simply a fool in making such a statement when people's lives are being affected day in and day out by the cuts in education and social services which the Government have inflicted on them?

Mr. Portillo: Despite the hon. Gentleman's colourful language, the figures and the arithmetic are against him. We are increasing total spending next year by 7·2 per cent., and the grant that is being made available by central Government is also increasing by 7·2 per cent. The Government are able to increase funding by more than the rate of inflation, and that is made possible only by the economic policies being pursued by my right hon. Friend the Chancellor.

Autumn Statement

The Chancellor of the Exchequer (Mr. Norman Lamont): With permission, Mr. Speaker, I should like to make a statement.
Cabinet agreed the Government's expenditure plans this morning, so I am now able to inform the House of the expected public expenditure outturn for this year; the plans for the next three years; our proposals for national insurance contributions in 1992–93; and my forecast of economic prospects for the year ahead.
As usual, the main public expenditure figures, with the full text of the economic forecast, will be available from the Vote Office as soon as I sit down. The printed autumn statement will be published next Wednesday.
This year's public expenditure survey has been a difficult one. There is no more challenging task in government than to choose between competing expenditure priorities, while keeping public spending as a whole under firm control. But there is also no greater test. Let me at once pay tribute to my right hon. and learned Friend the Chief Secretary, who has shown great skill and judgment in bringing the survey to a successful conclusion.
Firm control of public spending has been, and will remain, a key element in this Government's economic policy. From its peak in the early 1980s, we have reduced the ratio of public spending to national income by over five percentage points. This has been achieved by reducing the size of government; by a rigorous search for greater efficiency and value for money; and by prudent management of the public finances, which has led to a large saving in debt interest.
Over the past decade, this careful and responsible approach has enabled us not only to cut tax rates and reduce public borrowing but to make substantial and well-targeted spending increases in areas of priority; and it is this approach that will continue to underlie the Government's plans over the years ahead.
The prospect now is for renewed economic growth, but the recession has inevitably added to the pressures on public spending both this year and next. I expect public expenditure within the planning total to be almost £205 billion in the current fiscal year, slightly below the revised level I set in the Budget. An increase in programme spending, largely the result of weaker activity, will be offset by additional privatisation proceeds.
After four successive years of debt repayment, I made it clear in the Budget that we would see a return to public sector borrowing this year. I now expect a PSBR in 1991–92 of £10·5 billion, about 1·75 per cent. of GDP. Our fiscal position compares well with other Community countries. It remains the Government's policy to balance the budget over the economic cycle.
Last year, we made provision for substantial increases in expenditure over the next few years. So our objective in this year's survey has emphatically not been to make significant across-the board additions to existing plans.
But I have judged it right to allow expenditure to rise to meet the unavoidable consequences of weaker economic activity. Our priority has been to meet in full our commitments to the most vulnerable members of society; to maintain the expenditure programmes which contribute most to the long-term strength of the economy; and to improve the quality of public services.
For next year, the planning total has been set at £226·6 billion, some £5·5 billion above the figure published in the Financial Statement and Budget Reports. The planning totals in the two following years have been set at £244·5 billion and £258 billion respectively.
The planning total for 1992–93 assumes privatisation proceeds of £8 billion, the same level as we now expect in the current year. For the two following years, the level assumed is £5·5 billion, the same as in the last year's plans.
The new plans also include reserves of £4 billion, £8 billion and £12 billion respectively. These are higher than the corresponding figures in last year's plans, but by no more than I judge prudent and realistic. I am determined to contain pressures next year within the reserve.
Let me turn now to the individual spending programmes. First, health. Once again, we have provided for substantial improvements to patient care. Planned national health service spending in the United Kingdom in 1992–93 has been increased by £1·5 billion. Additional capital expenditure will enable the health service to make faster progress in upgrading buildings and equipment. Total national health service spending in England will rise by 4·2 per cent. in real terms between this year and next, and spending on hospital and community health services will rise by a full 5 per cent.
These latest increases will bring the total real increase in national health service spending since 1978–79 to well over 50 per cent. In England alone, this has funded an increase of 1·5 million acute in-patient and day cases a year, with 16,000 more doctors and dentists, 51,000 more nurses and 500 major capital schemes completed. At a time when tough decisions have been necessary across a range of public service programmes, we could not have made our commitment to the national health service more clear—[Interruption.]—We will not take any lectures from the Labour party, the party which in 1977–78, cut national health service spending by 3 per cent. and which cut capital spending by no less than 22 per cent.
The investment programmes of British Rail and London Transport amount to more than £2½ billion next year and will contribute substantially to the efficiency and competitiveness of the economy. But their income from passengers and asset sales has been adversely affected by weak trading conditions. We have therefore provided for increases in finance of over £1·4 billion in 1992–93 to support that investment. Public transport has rightly taken priority within the transport programme, and provision for expenditure on roads has been held to its planned level.
Social security represents over a quarter of all public spending. We have added £4·25 billion to plans in 1992–93. This reflects both higher unemployment and increased take-up of other benefits. In addition to full indexation of benefits, the new plans allow for higher rates of income-related benefits for disabled pensioners and those over 80, the Budget increase in child benefit, and the two new benefits for disabled people which come into operation next April.
The July local authority grant settlement made provision for an extra £1·4 billion of central Government funding next year to maintain the new balance between local and central funding of local services that I announced in the Budget. The Government are determined that this generous level of support should not be used to fund massive extra spending at the expense of local taxpayers. My right hon. Friend the Secretary of State for the


Environment has made it clear that he will be prepared if necessary to make full use of his recently extended powers to cap local authority budgets.
Approaching half of local authorities' revenue spending is on education, so the settlement should allow for a substantial increase in current spending on schools. Provision for capital work on all maintained schools next year will increase in real terms by 10 per cent. Taken together with lower construction costs, this will allow for a significant increase in school building work.
Public funding for universities and polytechnics will rise by 4·6 per cent. in real terms next year. This will help to finance a further increase in student numbers, enabling one in four of our young people to enter higher education next year compared with one in eight in 1979. By the end of the decade it should be one in three—a remarkable achievement. The proportion of students completing their courses in Britain is one of the highest in the industrialised world—a testimony to the quality of our higher education institutions.
The science budget, which pays for basic and strategic science carried out by the research councils, will rise by around 3 per cent. in real terms between this year and next. By 1994–95 it will be more than 7 per cent. higher than it is now.
We have made additions to nearly £500 million to employment spending in Great Britain next year. Overall, publicly funded expenditure on training, enterprise and vocational education will be two and a half times as high in real terms as in 1978–79.
The plans for defence include an increase of £830 million in 1992–93. They provide for the continuing costs of the Gulf conflict—in particular, the replacement of ammunition and equipment. They also meet the transitional costs—redundancy payments and works—needed to implement the new force structure and to secure the longer-term savings.
Full details of the new plans for other programmes are being made available separately.
We recognise that we cannot expect the private sector to control its costs if the Government do not do the same, so the plans we have made assume further improvements in efficiency and firm downward pressures on pay and other costs across the public sector. That underlies the tight settlements that we have made both on programmes and on running costs.
Reflecting the economic cycle, I expect public spending as a proportion of gross domestic product to rise slightly in 1992–93, before resuming its downward trend. Even at its peak, the ratio of public expenditure to national income will be significantly lower than the levels that had to be financed following earlier recessions. That is good news for taxpayers, both present and future, and good news for the economy. It is a testimony to the Government's prudent and disciplined approach to the public finances over the past 12 years.
I come now to national insurance contributions. As usual, the review this year has taken account of advice from the Government Actuary on the income and expenditure of the national insurance fund, and of the decisions on benefit rates set out by my right hon. Friend the Secretary of State for Social Security in his statement to the House on 21 October.
The lower earnings limit at which national insurance contributions begin will rise by £2 a week to £54 in April,

while the upper earnings limit for employees' contributions will go up by £15 a week to £405. The contribution rates for both employers and employees will remain the same, and the profits-related contribution rate for the self-employed will also be unchanged.
My economic forecast for 1992 was published today. Developments since the Budget have broadly confirmed the forecast that I made in March.
Over the past year, we have made dramatic progress on inflation. Retail prices index inflation has been more than halved, from almost 11 per cent. a year ago to about 4 per cent. in September. Measureas of underlying inflation have fallen too, though less sharply. RPI inflation, excluding mortgage interest payments, is down fromn 9·5 to 5·75 per cent. Producer price inflation, excluding food, drink and tobacco, is down from 6·5 per cent. to 4·75 per cent.
Also encouraging is the evidence of much greater realism in wage settlements. Average earnings growth has fallen from a peak of more than 10 per cent. to 7·75 per cent. in August; and those figures almost certainly understate the speed of the turnaround. According to the CBI, settlements in manufacturing industry averaged 5·5 per cent. in the third quarter, the lowest figure since the summer of 1987. Unit labour costs in manufacturing have actually fallen over the past three months. All that augurs well for the future, and suggests that the British labour market has benefited substantially both from our trade union and our supply side reforms.
As special factors drop out of the calculation of the RPI, inflation as measured by the RPI may rise slightly early next year, but it is forecast to fall back to 4 per cent. in the fourth quarter. Underlying inflation will continue to fall. Producer price inflation, excluding food, drink and tobacco, is expected to be 3·5 per cent. at the end of 1992, the lowest figure since the 1960s. The increase in the gross domestic product deflator, the widest measure of inflation in the economy, is also expected to fall next year.
I have never wavered from the view that the defeat of inflation is a necessary condition for economic success. The best performing economies are low inflation economies. Our objective is to match those economies, or better them. Our achievements on inflation are essential steps along the way.
To achieve that objective, we have followed a prudent and cautious monetary policy whose credibility has been underscored by our firm commitment to the ERM. The success that we have achieved on inflation has allowed us to cut interest rates without jeopardising sterling's position in the ERM. Interest rates have fallen 4·5 per cent. since last October, and are now below the average of the past 12 years. Our interest rate differential with Germany is at its lowest for 10 years.
As inflation and interest rates have fallen, it has become increasingly clear that we are emerging from recession. Consumer spending fell in the year to the second quarter of this year, but has been rising slowly in recent months. Service sector output seems to have stabilised in the second quarter, and manufacturing output may also now be picking up, though again slowly.
The monthly rate of increase in unemployment peaked in March and is likely to moderate further in the next few months as recovery gets under way. Consumer confidence has increased throughout this year as mortgage rates and inflation have come down, and it is likely to go on rising


as the fear of unemployment begins to abate. I expect to see personal consumption rise by 2·5 per cent. in 1992, providing impetus to the recovery.
As I forecast in the Budget, output is likely to fall by about 2 per cent. this year. However, that fall is now behind us; the economy may have already started to pick up. I expect GDP to rise 0·75 per cent. in this half year.
With consumer spending expected to go on rising, an end to the business investment recession in sight, and the rundown in stocks likely to slow, I expect GDP to rise by 2·25 per cent. next year. Growth will gather pace through the year. The increase in output from the second half of this year to the second half of next is expected to be 2·75 per cent.
The performance of our exporters this year has been remarkable. Our exports of manufactures have shown renewed vigour, up 5 per cent. in volume terms over the past year. Our volume share of world trade in manufactures looks as though it may rise again in 1991, for the third year running.
The current account deficit in the first nine months of this year was less than £5 billion. For the year as a whole, we are on track for a deficit of about £6·5 billion, or 1 per cent. of GDP, half the size of the deficit in 1990 and closely in line with my Budget forecast.
Some rise in the current account deficit is to be expected at this stage of the cycle, but I expect the rise to be moderated by a continued good performance on exports. The current account deficit is forecast to be £9·5 billion, or 1·5 per cent. of GDP, in 1992. With prudent financial policies in place, I foresee no difficulty in financing it.
Turning to companies, business investment has fallen over the past year. That is never welcome, but it must be set in the context of the boom in the late 1980s. Investment rose by 45 per cent. in the three years to 1989 and was at a record level in the first half of 1990. Even now, after the fall over the last year, business investment is nearly 40 per cent. higher than in the first half of 1979; and the share of the country's resources going into investment remains higher than at any point in the 1970s.
Investment usually lags the cycle in total activity, but it is likely to rise from about the middle of next year as profitability recovers, company finances improve, and the general pick-up in activity gathers pace.
The last few months have seen a surge in business optimism in nearly every sector, nearly every region, in businesses large and small. [Interruption.] The October CBI survey was just the latest—[Interruption.]

Mr. Speaker: Order. This is an important matter.

Mr. Lamont: —but the most authoritative—of a whole succession of recent surveys to confirm this. Business confidence is at its highest level for three years. Output expectations are up, investment expectations have improved, export optimism is rising. This gives powerful support to our view of the recovery.
The spending plans that I have announced not only honour our commitments in full; they also provide substantial additional resources for health, public transport, and education. Once again we have demonstrated that there is no inconsistency between prudent fiscal and monetary policies and high-quality, well funded public services.
Those are the policies that have allowed us to reduce inflation and to cut interest rates. They are the policies that have enabled us to increase spending on the health service, more than by half since 1978–79, to help the most vulnerable, and to invest in the young people who are Britain's future. They are the policies which are leading Britain to a sustained, non-inflationary recovery, and I commend them to the House.

Mr. John Smith: The autumn statement, as always, reviews the prospects for the economy for the year ahead as well as revealing public expenditure proposals. The House will recall that just 12 months ago the Prime Minister, who was then Chancellor of the Exchequer, gave an upbeat and optimistic forecast of the economy for 1991. He told us:
the British economy is coming back on track".—[Official Report, 8 November 1990; Vol. 180, c. 125.]
The word "recession" did not cross his lips. I remind the House of what the then Chancellor of the Exchequer said about economic growth. He said that it would resume early in 1991 and that the economy
is expected to grow by over 2 per cent. in 1991".—[Official Report, 8 November 1990; Vol. 180, c. 121.]
In fact, the right hon. Gentleman's successor told us today, rather diffidently, that growth for 1991 is minus 2 per cent.
According to the Prime Minister a year ago, fixed investment would experience what he called a modest downturn of 1·75 per cent. Today's statement shows that it has plummeted by 10·75 per cent. In last year's statement, unemployment was assumed to be 1·75 million in 1991. Today, we know from the Government's own figures that it is 2·46 million.
Far from "coming back on track", we have experienced a deep and damaging recession. Let us look at the cost in human terms. There have been 45,000 business failures—a record level of 860 every week; 85,000 house repossessions—a record level of 635 per week; and unemployment has risen by 750,000. That is the price that the Chancellor thinks is worth paying by the people of this country.
Today, the Chancellor provided the evidence that condemns the Prime Minister's economic forecast as no more and no less than a gigantic confidence trick. The House and the nation would be well advised to treat with scepticism any economic forecast that the Government produce, let alone one that covers a period that must include a general election.
Given the Government's past performance, it is no surprise that once again they are promising good times just around the corner, but in the detail of the Government's own predictions, and in the forecasts of independent commentators and institutions, there is revealed disturbing evidence of the real state of our economy.
According to the International Monetary Fund's most recent survey, the United Kingdom will be the only country among the G7 nations in which investment will fall during 1992. Both the Confederation of British Industry and the National Institute of Economic and Social Research predict an even deeper fall in manufacturing investment of between 8 per cent. and 9 per cent.—that is, a further fall on top of the precipitous decline this year.
Earlier this week the average of independent forecasts conveniently compiled by the Treasury revealed that in 1992 employment growth will fall by 1·2 per cent. and unemployment will rise to 2·8 million. I ask the Chancellor


how we can he expected to believe his forecasts of successful and sustained recovery if in the year ahead investment continues to fall and unemployment continues to rise.
Why is it that next year the United Kingdom will be the bottom of the G7 league table for investment and employment growth? When the Chancellor's own forecast shows a £3·5 billion widening in the balance of payments deficit, is it not clear that our economy continues to suffer from a serious imbalance, which can only be corrected by investment in manufacturing industry, new technology, and training?
In that context, why is it that the autumn statement confirms continuing cuts in the Department of Trade and Industry's budget, which after the statement will be only half the size it was three years ago? When training is properly regarded as crucial to our prospects for recovery, why is it designated a non-priority area? Is it not the case that there will be no increase in real terms in the budget for youth training and employment training? Is it not the case also that the increase in the Department of Employment's budget is almot entirely to deal with the cost of extra unemployment and not with any real addition to training?
The Government claim to have increased spending on education by 8 per cent. in cash terms. Will the Chancellor confirm that the increase in real terms is half that amount—4 per cent., or about £290 million? Can it seriously be argued that education is a Government priority when the latest available figures for all education spending show that the proportion of gross domestic product committed to education has fallen from 5·5 per cent. to 4·6 per cent.?
We welcome any additional expenditure on health; it is much needed. The Chancellor claims a cash increase of £2·7 billion; but, if we apply the GDP deflator, is it not clear that the real increase is £1·2 billion?
Does not the Chancellor appreciate the scepticism that is aroused by public spending increases in a pre-election period, given the Conservative party's recent history in this regard? Before both the 1983 and the 1987 general elections, the Government made expansive announcements about public expenditure increases; yet, as we know—and as is clear from our national accounts—the following years were years of cutback and recession.
An example of that technique is contained in the public transport proposals. I note from the detail of the Government's figures that the external financing of British Rail is forecast to increae by £500 million in the next year 1991–92.

Mr. Julian Brazier: We are not borrowing it from the IMF.

Mr. Smith: Let me remind the hon. Gentleman who interrupts me that the Government are forecasting a £500 million increase in 1991–92. The forward plans, however, show that external financing will be cut by £1 billion in 1992, 1993, 1994 and 1995. Is not that abundant evidence of yet another confidence trick in the making?
The public must be aware that, at the same time as giving the impression that they are committed to increasing public expenditure, the Government are making promises to cut the standard rate of income tax, not merely to 20p in the pound, but below that. Both the Prime Minister and the Chancellor do that on every possible occasion.
The Government's record on economic growth is pathetic: and average of 1·75 per cent. annual growth from 1979 to 1991. [Interruption.] Let me repeat those figures, in case Tory Members did not hear them because of the hubbub that they were creating. Average annual economic growth between 1979 and 1991—as is revealed by the Government's own answers—was 1·75 per cent. The Government cannot, therefore, reconcile their commitment to increase public expenditure with a simultaneous commitment to make dramatic reductions in income tax—unless, of course, they plan large increases in value added tax.
In both their economic forecasting and their public spending proposals, the Government are engaged in a process of deception, which, as they will soon discover at the election, will not fool the British public.

Mr. Lamont: The right hon. and learned Member for Monklands, East (Mr. Smith) implied that the plans that I announced were optimistic. He quoted selectively from what the IMF was saying, and from its projections for economic growth in this country. What he did not tell the House was that the IMF is predicting that Britain's economy will grow as quickly as the G7 average, and will actually grow faster than Germany's economy in the second half of next year. That has been predicated, not by the Government, but by the International Monetary Fund.
What the right hon. and learned Gentleman ignored was the fact that our forecasts are in line with those of independent organisations such as the IMF, the Organisation for Economic Co-operation and Development and the London Business School. Those institutions have confirmed that our forecasts are realistic, and cautious as well.
This time last year, the right hon. and learned Gentleman did not believe that we would get inflation down to 4 per cent.; but we did. He does not acknowledge what he was saying a year ago.
The right hon. and learned Gentleman talked again about investment. As I explained to him in my statement, investment is already at a high level. It has fallen during the recession, but we experienced three years of sharp increases in investment. The ratio of investment to gross domestic product is higher today than it was under any Labour Government, including the last Labour Government.
The right hon. and learned Gentleman asked about the Department of Trade and Industry's budget. There are cuts in that budget, and rightly so. What matters to industry is the environment—the conditions for and the profitability of industry—not the DTI spending money. The Government's innovation programme will at the same time be maintained and over the survey period will increase.
The right hon. and learned Gentleman asked about the Department of Employment's budget. That will be increased by £480 million, including £178 million for Employment Action. As a result of the package that I have announced today, nearly I million people will be helped by the Department of Employment's programme next year. That is the increase we are making, and the right hon. and learned Gentleman ought to have welcomed it.
The right hon.and learned Gentleman implied—as did his hon. Friend the Member for Derby, South (Mrs. Beckett), the shadow Chief Secretary, on radio—that in


the past we have announced expenditure plans that sometimes were not implemented. If he is more worried about that than the control of public expenditure, which I am much more worried about, that must mean that he thinks that recovery in activity is going to be stronger. [Interruption.] The right hon. and learned Gentleman does not understand the point. Public spending would be reduced if expenditure on social security and losses in some of the nationalised industries were lower as a result of a recovery.
The right hon. and learned Gentleman tells us that the rate of growth will not be achieved. He points to what he thinks is the Government's poor record compared with that of the Labour Government. He ought to look at his figures more closely. Between 1974 and 1979, non-oil GDP grew by 1·2 per cent. under the Labour Government. Between 1979 and 1991, non-oil GDP grew by 1·7 per cent. under this Government. We are not making the comparison at a particularly favourable moment—in the trough of a recession. There is little evidence that the policies of the right hon. and learned Gentleman will achieve any growth. His most revealing comment was that he welcomed any increase in public spending at all. He can tell us that again. He is committed to an increase of £35 billion a year on top of the plans that we have already announced, which are realistic.

Several Hon. Members: rose——

Mr. Speaker: Order. I remind hon. Members that we have a debate tomorrow on this subject and that there will be a public expenditure debate later. Therefore, I ask for brief questions, please, to the Chancellor of the Exchequer so that as many hon. Members as possible may be called.

Mr. Terence L. Higgins: Does the Chancellor of the Exchequer recall that, in its report on the Budget, the Treasury and Civil Service Select Committee stressed that it was important that the so-called automatic stabilisers should be allowed to operate fully and that there was a case for supplementing them with discretionary increases in public expenditure? Can my right hon. Friend confirm that what he has said this afternoon is in line with that? Is it not important, however, to stress, particularly for the benefit of the foreign exchange markets, that some increase in the public sector borrowing requirement at this stage in the cycle is entirely appropriate and in no way reflects any weakening of his determination to win the battle against inflation?

Mr. Lamont: My right hon. Friend is absolutely right. The increase that I have announced today to some extent reflects weaker trading conditions and the recession. That causes part of the increase in social security and part of the increase relating to the transport nationalised industries. Over half the increase in programme spending arises in three areas—social security, transport and the national health service. We are following precisely the policy that my right hon. Friend suggested. We felt it right to accept the inevitable costs at this stage in the economic cycle and not to cut back on long-term plans that will strengthen the economy.
This is a prudent and moderate settlement. Because of shouting by Opposition Members when I made my statement, I was not able to point out that the increase in

the ratio of total Government expenditure to gross domestic product, both central and local, is only half a percentage point next year. That will bring it to 42 per cent., which is way below the peak in previous cycles and way below the proportion of public expenditure to GDP under the last Labour Government in similar conditions.

Mr. A. J. Beith: Does the Chancellor recognise that his optimism about 2·25 per cent. growth is not shared by all commentators and that if he is proved wrong these figures will be shot to pieces? How can he believe that the fear of unemployment will go away while unemployment has continued to rise?
Does the right hon. Gentleman recognise that the figures that he has announced for training and education will go nowhere near far enough to fill the skills gap? The figures for railways might sound encouraging, but, when looked at in detail, they fall away sharply in the subsequent two years. The most eloquent comment was when he talked about his desire, once the election is out of the way, to resume the downward trend. Having seen the decline in public services over the past decade, I hope that he never has that opportunity. Is this not a quick election fix rather than a programme of long-term investment to improve our competitiveness?

Mr. Lamont: I explained to the House why I believe that the forecast that I have made is both cautious and realistic. I explained that it is in line with forecasts being made by the IMF, the OECD and the London business school. We are expecting that the British economy next year should grow in line with the G7 average. All we are expecting at this stage is modest growth in this half year. I see no reason why we should not accelerate again up to the average of the G7 countries. It has happened before and, with falling inflation, we will achieve the growth again. We did it before, and we have the same conditions again.
The increase in growth will come from exports, which have done remarkably well by increasing their share of world trade for three successive years. We are expecting exports to rise by 6 per cent. again next year. Also, some of the growth will come from consumer demand.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the increases for transport. What I have announced today are additional to the existing base line. Last year's published plans already show substantial increases in investment. For example, investment for transport nationalised industries will double over the next three years compared with the past three years. Spending on roads will double from the period 1988–89 to 1992–93. We must look at the existing base line plans, not just those announced today. The hon. Gentleman does not seem able to make that simple distinction.

Sir William Clark: Is my right hon. Friend aware that the moderate increases in health, transport and education will be widely welcomed throughout the country, if not in all parts of the House? Does he agree that the public sector borrowing requirement for this year and next year should be set against a background that, over the past three or four years, the Government have repaid some £27 billion of the national debt? That is what we should look at when we are talking about the public sector borrowing requirement. In 1979, the public expenditure burden on the taxpayer was some 44 per cent. of the national income. Even with the


moderate increases announced today, the figure is very much lower—about 41 per cent.—and is proof positive that the Government still have a firm control over public expenditure.

Mr. Lamont: I am grateful to my hon. Friend. He is correct in intimating that, if we make international comparisons, the fiscal position of the Government, even at this stage of the cycle, compares well with that of other countries. At 42 per cent., the ratio of public spending to GDP is well below the European Community average. The public sector borrowing requirement is also below the level of Germany, which is about 5 per cent. now. Our PSBR is less than in previous recessions and at comparable points in the cycle in the past. Under the Labour Government of 1975–76, the PSBR was 9·5 per cent. of GDP—the equivalent of £55 billion today. It is now a different world, and we intend to stick to it.

Mr. Robert Sheldon: I may be a little old-fashioned, but I can never rejoice in a definition of a recession that includes vastly increased unemployment. Will the right hon. Gentleman make it quite clear where the money is coming from? Will not the extra money come from more privatisation? He is selling more of the family silver year by year, but when it has gone what will he do?

Mr. Lamont: The right hon. Gentleman, whom we all respect and like, knows that the way in which we treat privatisation proceeds is in accordance with the way in which they are treated by other Governments. Of course the costs of recession are unpleasant, and, as my hon. Friend the Member for Croydon, South (Sir W. Clark) said, they have been reflected in the increased borrowing requirement. That is where the main adjustment has been made.
The right hon. Gentleman asks where the money is coming from. We continually ask Labour Members that question.

Mr. Charles Wardle: If my right hon. Friend's spending plans are to have the most beneficial effect on the economy, will not it be essential to contain all public sector pay settlements well within the target rate of inflation?

Mr. Lamont: My hon. Friend makes a good point. He will recall that in my statement I stressed the need for the Government to look after their own running costs and pay settlements in Government Departments. His comments apply to the public sector more generally and more widely; we cannot let the burden fall on the private sector. The less the discipline in the public sector, the more it will hit the private sector. I entirely agree with my hon. Friend, and I am grateful for his drawing my attention to that point.

Mr. Thomas Graham: Is the Chancellor aware that a recent survey showed that the cost of basic foods in British supermarkets was one of the highest in Europe? Does he realise that he has done nothing today to help the millions of people who are living in poverty because of the Government's inaction in dealing with high interest rates and unemployment?

Mr. Lamont: The hon. Gentleman says that we have done nothing to deal with poverty and the more disadvantaged members of the community. He will be aware that a large part of the social security increase that

we announced will be spent on unemployment benefit, but perhaps he was not here when my right hon. Friend the Secretary of State for Social Security made his announcement, which included help for older pensioners and a number of measures designed to help the weaker and most disadvantaged members of society. I should have thought that the hon. Gentleman would welcome that.

Sir Ian Stewart: I congratulate my right hon. Friend on sticking with his policies of getting inflation down and keeping control of public expenditure, despite the background to the economy in the past year. Will he confirm that reducing the proportion of GDP that goes on public expenditure to its present level, which is much lower than in previous recessions, gave room for the reductions in personal taxation in the past 10 or 12 years? That is the main difference between economic management under a Conservative Government and the Labour Governments that went before.

Mr. Lamont: My hon. Friend is right. Our past prudence in public expenditure gives us a considerable advantage today. Because we controlled public expenditure in the past, the burden of debt interest is less, and in the longer term that enables us to devote a little more to programme expenditure. We intend, as my hon. Friend advocates, to continue to reduce public expenditure as a proportion of GDP. That policy is not incompatible with increasing and improved provision for basic state services.

Mr. Peter Shore: An increase of £21 billion in public expenditure is certainly welcome, but the right hon. Gentleman has not yet told us what is to be the size in 1992–93 of the PSBR. Will he confirm that it will be above 4 per cent. of GDP'? Is he aware that if it were above 3 per cent. of GDP he would not be able even to make his statement in the House if he signed the present draft of the treaty of economic and monetary union in Maastricht which would limit not only this Chancellor but any other Chancellor to spending not more than 3 per cent. of GDP through public borrowing? What does he say about that?

Mr. Lamont: The right hon. Gentleman should realise that it is not normal in the autumn statement to make a forecast of the PSBR for the coming year. As with various other matters, an assumption is published and the assumption in the documents is for a PSBR of 3 per cent. next year. That assumption reflects the lagged fall in corporation tax receipts, which tends to continue even after recovery has begun.
The right hon. Gentleman refers to prospective rules that might emanate from Europe under provisions for a single currency—binding rules on budget deficits. No such rules have been agreed and, in any case, we intend to stick very closely to maintaining a tight fiscal position. As I explained, our fiscal position compares well with that of other countries. Our proportion of public expenditure to GDP is well below the average of other European countries.
As for the PSBR, I dread to think what the right hon. Gentleman thinks he could do to that with expenditure plans of £35 billion. Will it rise to 9 per cent. of GDP, as it did last time?

Mr. David Shaw: Does my right hon. Friend agree that one of the very pleasing results of his announcement today is that it is confirmation that, despite


the recession, the Government have managed to sustain the health, welfare, social security and education programmes throughout the recession without any significant cuts and, indeed, with significant increases in expenditure? Is that not in complete contrast with the problems of the previous Labour Government, when the only solution to the economic crisis in which they placed the country was to cut, cut and cut again from the health and welfare programmes? Is this not a major achievement by the Government?

Mr. Lamont: My hon. Friend is absolutely right. The previous Labour Government did what the right hon. Gentleman is threatening to do again: they overspent and overborrowed, had too high inflation and were forced to do what they professed that they did not want to do. They cut back massively on state services and on capital investment in them. As a result, total spending on the national health service is now 5·7 per cent. of GDP, compared with 4·8 per cent. when the Opposition were in power. Even as a proportion of public spending in total, spending on health in 1992–93 is 15 per cent. of total public spending compared with only 12 per cent. in 1978–79.
There can be no gainsaying the fact that we have made considerable increases over the years in spending on the health service. There has been a 54 per cent. real increase since 1978–79. As I said, for hospital and community health care services there is a 5 per cent. real increase next year, which everyone who is impartial and able to consider the issue with an unbiased and fair mind would regard as a very generous and well-intentioned settlement.

Mr. William Ross: Surely the Chancellor today told us that he expected public expenditure to rise by about £53 billion over the next three financial years—an increase of more than a quarter of the current financial year's expenditure. Is he also prepared to say that he expects tax revenues to rise sufficiently to meet that increased expenditure—or does today's statement really represent a decisive shift from the doctrine of balanced budgets?

Mr. Lamont: It is an extremely important point that our intention and our policy are to balance the budget over the cycle. The hon. Gentleman is quite right. As he knows, corporation tax is paid a year in arrears and corporation tax receipts, therefore, very much lag behind the cycle. That is why we expect the public sector borrowing requirement to continue to be high next year, even though the recovery will be well under way. The plans that I have announced today and what I have said about the PSBR are consistent with our firm policy of balancing the budget over the cycle.
The right hon.Member for Bethnal Green and Stepney (Mr. Shore) referred to public sector borrowing of 3 per cent. next year. We had a public sector debt repayment of 3 per cent. at the peak of the cycle. We balanced it over the cycle and we will balance that 3 per cent. just as we balanced the previous 3 per cent.

Mr. Nicholas Budgen: Will my right hon. Friend confirm that the only way to accelerate recovery now is substantially to reduce interest rates? The very slow increase in both credit and the money supply show that that is both safe and wise. My right hon.

Friend is prevented from taking that necessary measure simply by our membership of the exchange rate mechanism.

Mr. Lamont: I sometimes suspect that my hon. Friend is not quite as stern and unbending as he likes to pretend. We could not have got on top of inflation and reduced inflation in the way that we have—more successfully than any other country in the past year, because we have had the most dramatic reduction in inflation—if we had followed my hon. Friend's advice. If we had let the exchange rate go, that would simply have added to inflationary pressures. It would have lowered living standards and it would have done nobody any good. I realise that a projection of 0·75 per cent. growth in this half year is modest, but we normally come out of recessions gradually, and I have every confidence, based on what we already see about consumer spending and on the figures that we have seen for output, that the forecast that I have outlined to the House today, which is in line with many other forecasts, will be realised.

Mr. Merlyn Rees: Have the increases in public expenditure announced in the autumn statement in November been influenced in any way by the fact that a general election will take place in the first six months of next year?

Mr. Lamont: I have explained to the House that the targeted increases are ones that, for the most part, we believed we had to make because of weaker activity. I explained how more than 50 per cent. of the increase in the planning total came from social security, from the transport nationalised industries and from the health service. I should be very surprised if the right hon. Gentleman were suggesting that the increase in the health service was in any sense unjustified. Given what I have told the House about the ratios and about our PSBR compared with that of other countries, I believe that the increases are prudent and cautious, and can in no way be described, as the right hon. Gentleman seems to imply, as some sort of cynical giveaway.

Mr. Quentin Davies: Does my right hon. Friend appreciate that he deserves considerable congratulation, first, on the decision that he and the Prime Minister took last year to join the exchange rate mechanism, which enabled us to bring down interest rates by 30 per cent. and inflation by 60 per cent. over 12 months—an extraordinary achievement—and, secondly, on getting his forecasts consistently right? He got the balance of payments outturn more or less exactly right. He said that growth would resume in the second half, and we are getting growth resuming in the third quarter—right now, in this quarter. He got the inflation rate for the end of the year right to the last decimal point. That is a very impressive record.

Mr. Lamont: I am grateful to my hon. Friend. He knows that I am always very cautious about economic forecasts, and always treat all forecasting with some scepticism, as is right, and as we emphasise in our published forecast. But it so happens—perhaps surprisingly—that my forecast in the Budget has proved extremely accurate on both inflation and output, and, as my hon. Friend said, on the current account. I am grateful to my


hon. Friend for what he said about inflation and interest rates, and I believe that the progress that we have made has been welcome to the country.

Mr. James Lamond: Does the Chancellor recall that, about a year ago, from a comfortable job and home, he told us that the only acceptable way out of the mess that his Government had got into over the past 11 years was for people to sacrifice their businesses, their homes and their jobs in order to reduce inflation? After hundreds of thousands of people have done just that, today the right hon. Gentleman tells us that inflation will creep up again. Would not any reasonable person, hearing that, decide that the Government should not be returned at the next election?

Mr. Lamont: I have always made it clear that there is no conflict between fighting inflation and fighting unemployment. We know that, if we let the spectre of inflation get worse, it would he disastrous for our exporting companies and for employment, so there is no contradiction involved in wanting to fight inflation, too. That is the priority that we must have, and that is the battle we have had to fight—with very little support from Labour Members, who are not remotely interested in inflation.

Mr. John Townend: Does my right hon. Friend agree that the more he increases public expenditure the more the Opposition demand further increases, especially on health? Will he tell the House to what extent the increases announced today will delay both a return to a balanced budget and further reductions in taxation?

Mr. Lamont: As I have explained to the House, our policy remains to achieve a balanced budget over the cycle. I believe that the plans that we have announced this year are compatible with that. When setting the PSBR for next year, I shall bear our objective in mind. My hon. Friend is right to stress that objective, because it is and must remain our policy, and we should not depart from it. We have made it clear that our medium-term objective—not necessarily over one Parliament—is further to reduce the rate of income tax. I believe that that would be compatible with the policies that we have followed and will continue to follow.

Mr. Alan Williams: Will the Chancellor confirm that the rate of growth that he suggests for the first six months is only half that needed simply to stop unemployment from continuing to rise? Will he also confirm that his full-year rate of growth is less than the likely rate of increase in productive potential, and that he is therefore planning for rising unemployment throughout the next 12 months? Will he come clean and tell the House what assumptions about unemployment underlie the expenditure plans announced today?

Mr. Lamont: I do not accept for one minute what the right hon. Gentleman says. The monthly rate of increase in unemployment has come down sharply. In March it was 110,000; last month's figure was just over 35,000. [Interruption.] I am answering the right hon. Gentleman's question. I expect the monthly trend to continue to decline.
As for whether the rate of growth that I project will be sufficient to stop the rise in the rate of unemployment, the right hon. Gentleman will have noticed that the rate of growth projected for the second half of next year—2·75 per cent. on the second half of this year—is very close to the

long-term trend growth of the British economy. Therefore, the premise on which the right hon. Gentleman's question was based is not correct.

Mr. Nigel Forman: Does my right hon. Friend agree that the prospects for a sustained and non-inflationary recovery of the economy at this phase in the cycle are greatly improved by the fact that unit labour costs in manufacturing have been moving downwards and by the fact that our proportion of world trade has been moving upwards? Is it not perfectly clear that that policy and approach to the economy is greatly to be preferred to that of the Labour party, which seems to rely on overspending, over-borrowing and over-taxing, which will keep them over there?

Mr. Lamont: My hon. Friend might have added that the Labour party's policy is also to encourage every inflationary wage claim in the public sector. I have never yet heard Labour Members not support such a claim, and the right hon. and learned Member for Monklands, East (Mr. Smith) was at it again on television the other day.
My hon. Friend is absolutely right: one of the most welcome developments is that our unit labour costs are falling. It is not just the rate of increase that is falling: our costs have actually been falling. That means that there is a much better outlook both on inflation and for exports, and, as my hon. Friend said, our exports have done extremely well in recent months.

Mr. Giles Radice: Will the Chancellor tell the House what assumptions about unemployment he has given the Government Actuary for the coming year?

Mr. Lamont: Yes: 2·4 million.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that someone listening only to the black propaganda about what we are doing to destroy the national health service would be forgiven for believing that the money spent is going down, whereas the chart shows that, since 1978–79, the money spent has increased from £6·5 billion to £34 billion—a 50 per cent. increase in real terms. That shows a great commitment to the national health service on the part of the Conservatives than the socialists—the only party to have reduced spending—have shown in their lives?

Mr. Lamont: I am grateful to my hon. Friend for emphasising the point. I think that I have already made the point about the increases that we have made, the proportion, of GDP, the proportion of public expenditure and so on. There is no doubt that this Government have provided well, and provided massively, for the health service. The Labour party is interested in spending more money on the health service; it is not remotely interested in ensuring that it is better run and better administered.

Mr. Gordon McMaster: Given that the autumn statement offers no change in this Government's no-hope economic policies, does the Chancellor still think that unemployment is a price well worth paying—yes or no?

Mr. Lamont: I told the right hon. Member for Swansea, West (Mr. Williams) that I think that it is necessary to fight inflation, and fighting inflation gives the best prospects for employment. The low inflation countries are those that


have the best record on unemployment. That is why, even given the current recession, there are now 800,000 jobs more than there were in 1979.

Mr. Robert Adley: Is my right hon. Friend aware that this is the twelfth year running that the Government have produced an autumn statement in the autumn and the twelfth year running that they have produced a Budget in the spring, whereas, under the Labour Government, and when the right hon. Member for Leeds, East (Mr. Healey) was Chancellor, the economy was in such a spiral of decay and disorder that, at one stage, statements were coming before the House monthly?
Is my right hon. Friend further aware that, if he reads his own speech, he will see that he did not mention the IMF—because he did not need to mention it? Does he recall that, when the Labour party was in government, the name of Mr. Witteveen was on everybody's lips because the Labour Government were constantly going cap in hand to the IMF? Is it not clear that the reason why the people of this country trust the Government's economic policies is that we do better for them?

Mr. Lamont: My hon. Friend is right that, like all our autumn statements, the present autumn statement contains no tax measures, whereas the Labour Government were always having to introduce emergency budgets and tax measures in the autumn. My hon. Friend is right: every Labour Government in my lifetime have made the same mistakes and ended up the same way. A future Labour Government would be no exception.

Mr. Alex Salmond: I acknowledge the Chancellor's belated—almost deathbed—conversion to the sanity of Keynesian economics, even if it has been done for the shabbiest of electoral reasons. Will he confirm, however, that, after allowing for inflation, real interest rates are still among the highest this century? When will they come down in real terms?

Mr. Lamont: I do not agree with the hon. Gentleman's first assertion. The fact of allowing and conceding the automatic effects of a recession does not tally with what he likes to call Keynesian economics. He may have noticed that there was an interesting article on this very theme by Mr. Gavyn Davies—formerly, I think, an adviser to the Labour party, but an admirable commentator none the less. He disagreed with what the hon. Gentleman has just said—[Interruption.] I am sorry, but if the hon. Gentleman has read the article, he has misunderstood it. I am afraid that he has also misunderstood the point about interest rates. It is true that in real terms in recent years interest rates have been historically high across the world. Our real interest rates are not out of line with real interest rates in other European countries.

Mr. Tim Smith: Should not my right hon. and learned Friend the Chief Secretary to the Treasury be congratulated on a successful outcome to a public spending round that was carried out in difficult circumstances? Did not Labour, when it was in charge of the Treasury, cut hospital spending by 20 per cent. in one year and also cut nurses' pay in real terms? Should we not compare that with the remarkable announcement made by my right hon. Friend the Chancellor of the Exchequer

today that health spending has risen by an increadible 54 per cent. over 12 years and that no less than 4 per cent. is forecast as the increase for the forthcoming year?

Mr. Lamont: My hon. Friend's comments about my right hon. and learned Friend the Chief Secretary to the Treasury are absolutely right. Various people have implied that the settlement is in some way influenced by the general election. We have of course tried to come up with a settlement that we believe is responsible and prudent. However, without revealing any secrets, let me say that the task of my right hon. and learned Friend the Chief Secretary was made difficult in recent months as a result of the rise in the political temperature. However, he has done an absolutely exceptional and outstanding job in very difficult circumstances.
On my hon. Friend's second point, we have made considerable increases in health service spending: £2·7 billion is the year-on-year increase, and I believe that the House should welcome that.

Mr. Doug Hoyle: Why cannot we get away from this ritual of an autumn statement and a Budget the following year? It reminds me of a witch doctor who is called in by a primitive tribe in the hope that there will be rain and sunshine and a bountiful harvest some time in the future. Why is there no comfort in the Chancellor's statement today, or in his Budget, for manufacturing industry? Why is he doing nothing about the chronic underfunding of training when even TECs, set up by the Government, claim that as a result of a lack of funding they cannot guarantee a place for the young and long-term unemployed? What we have today is a fourth-rate statement made by a fourth-rate Chancellor.

Mr. Lamont: In his opening remarks, I am not sure whether the hon. Gentleman was attacking the procedures of the autumn statement. It was not the purpose of this autumn statement to review the general way in which we tackle expenditure and separate it from taxation. As he knows, that matter is widely debated. I do not agree with him that there are not things in the statement that will be welcome to manufacturing industry. Industry will welcome the continued and increased expenditure on public transport. That is exactly what employers and the Confederation of British Industry have been asking for. They have also welcomed the considerable increase in roads expenditure which is already present in the base line. Above all, I am sure that manufacturing industry will welcome the fact that next year we are going to get back to growth in line with the G7 average.

Sir Anthony Grant: Is my right hon. Friend aware that the 8·5 per cent. increase in spending on education and the 10 per cent. in real terms on school buildings will be particularly welcome in Cambridgeshire? Since 1979, the number of young people entering higher education has doubled. Do not those facts demonstrate that the Labour party's claim to be the only friend of education is sheer bunkum?

Mr. Lamont: My hon. Friend puts it extremely succinctly. Spending per pupil has increased by 40 per cent. in real terms since 1979, and that adds force to my hon. Friend's observations.

Mr. Dave Nellist: Is it not clear that the freeze in real training budgets which the


Chancellor announced today means that yet again there will be no increase in the abysmal level of youth training allowances? Had those allowances, which were introduced in April 1978, risen in line with the level of average earnings, youngsters on youth training schemes would be on £68 a week—about £40 more than the £29·50 that they actually receive. It is clear that, among today's pre-election, elastoplast political announcements, 16 and 17-year-olds have no vote.

Mr. Lamont: We have honoured all our pledges on youth training. I announced today that there will be additions to plans of £480 million to the Department of Employment's programme. That includes more for employment training and £178 million for employment action. Next year, the Government will be spending 2·5 times more on training in real terms than in 1978–79. Most of my colleagues and most fair and unbiased people would regard the increases that I have announced as very substantial. Only a party that was totally divorced from financial reality could go on asking for more.

Mr. John Butterfill: Will my right hon. Friend the Chancellor confirm that the recollections of the right hon. and learned Member for Monklands, East (Mr. Smith) about the outcome of election pledges are quite erroneous? Does my right hon. Friend recall that, in 1987, the Labour party pledged that another £2 billion over and above the current levels would be necessary to sort out the problems of the national health service? Can he confirm that this Government exceeded that figure within months of once again gaining office and that the present levels of expenditure, coupled with today's announcements, are beyond Labour's wildest dreams and certainly beyond what it could ever achieve?

Mr. Lamont: My hon. Friend is right. Expenditure on the health service has been averaging 3·6 per cent. in real terms. We have done more than the Labour party said at one stage that it would do. However much we do, Labour always promises to do more. Labour is not interested in containing public expenditure or taxation.

Ms Kate Hoey: Is the Chancellor aware that his statement offers nothing in terms of improving housing to the millions of people who listened to his statement who live in substandard, overcrowded and squalid housing? Does he realise that housing is in crisis, not just in inner-city areas such as mine, but throughout the country? What is he offering in his statement to people who need adequate and affordable housing?

Mr. Lamont: If the hon. Lady looks at the expenditure plans and the base line, she will see that there are considerable resources for housing. We made very large increases in the amount available to the Housing Corporation. I hope that she will not be misled by figures for the housing revenue account which are affected by interest rates: the point is the expenditure made available by central Government to the Housing Corporation. In the past two years we have made substantial additions; it is now a substantial programme. I do not accept that the situation for people in difficulties is without hope. We have done a lot.

Mr. Keith Mans: Does my right hon. Friend agree that our export performance over the past year is particularly encouraging, bearing in mind the fact that our

major trading partners—France, Canada, the United States and Spain—have all been in recession? Does he also agree that it would be virtually impossible for us to maintain our international competitive advantage if he ever followed the policies advocated by the Labour party?

Mr. Lamont: My hon. Friend is right. As I have said, we have seen an increase in our share of world trade. I expect that our exports will be even more successful next year. That, of course, is reflected in the current account deficit, which is much smaller this year than last. That is largely due to the strength of exports.

Mr. Terry Patchett: Several times this afternoon the Chancellor used the term "targeted increases". Would he use the same terminology to describe the present unemployment figures?

Mr. Lamont: The expenditure increases are targeted, and they are targeted at those areas that we think are most deserving and most in need, but, at the same time, we want to follow responsible and prudent policies to balance the budget over the medium term.

Mr. Ian Taylor: My right hon. Friend is absolutely right to target extra expenditure on the key public services. However, would it not be that much more difficult to achieve that in order to keep a reasonable PSBR if there were no future revenues from privatisations, which are £8 billion next year and £5·5 billion in the years thereafter? Is not that what the Labour party would recommend delivering—no revenue from privatisations and therefore a much more difficult task of boosting public services?

Mr. Lamont: My hon. Friend makes a very good point, and it is relevant to our £35 billion costing of Labour's programme. Opposition Members will not tell us what they regard as wrong with that £35 billion figure, but, in fairness to them, one of the points that we have not made is that they would not have the benefits of privatisation receipts, and that is why their public expenditure proposals are even greater nonsense than the country already realises.

Several Hon. Members: rose——

Mr. Speaker: Order. It may not be possible to call all hon. Members who wish to speak, but I will allow questions to continue for a further five minutes. If hon. Members are brief, most of them may be called.

Mr. Peter Hain: The people of Wales have about as much confidence in the Chancellor's policies as they have in the antics of Eddie the Eagle. There is a great gap between the Chancellor's promises to reduce income tax and the spending promises of his spending Ministers. Is not the only way that that gap can be bridged by the Chancellor increasing VAT? If the Government are re-elected, will the Chancellor increase VAT—yes or no?

Mr. Lamont: The hon. Gentleman is totally wrong. One can increase spending and cut taxes at the same time. I do not know where the hon. Gentleman has been—he has not been in this House very long—but we have been doing that ever since 1979.

Mr. Robert Litherland: As the Chancellor claimed that business is gaining confidence, what does he think of the words that emanated from the


CBI last week when it lambasted the Department of Trade and Industry for the unneccessary recession that has cost British industry billions?

Mr. Lamont: The hon. Gentleman talks about the CBI. I have looked at the CBI's booklet entitled "Competing with the World's Best", its report on manufacturing. I noticed how it very much endorses our view that there has been a remarkable improvement in the performance of British industry. For example—one did not read this very much in the press—it states:
Most of those responsible for running British industry believe that there has been a marked improvement in performance during the 1980s, which has been more than a temporary phenomenon.
That is the view of the CBI, and it is also our view.

Mr. Bob Cryer: Will the Chancellor of the Exchequer confirm that the increase in social security spending is due to what he terms weaker economic activity, which is a euphemism for the millions in unemployment, for which the Government are responsible? Will he confirm that the cost in increased social security expenditure and lost tax revenue will be about £20 billion? Does he agree that it would be far more sensible to spend much more than 10 per cent. on capital expenditure in education in a city such as Bradford, with its crumbling schools after 12 years of neglect by successive Tory Governments, to create jobs in buildings that are much needed, and to reduce the dole queue rather than spend money on sustaining it?

Mr. Lamont: On the hon. Gentleman's first point about the social security budget, there is an increase of about £4·25 billion, and about £2 billion is for unemployment benefit. There is also the take-up of other benefits, the new benefits for disability and the increase in child benefit, which I thought was welcomed by the hon. Gentleman. His caricature of the social security settlement that my right hon. Friend the Secretary of State announced to the House is not wholly accurate.
On capital spending, £1·25 billion has been added to capital spending plans. That is about a fifth of the increase in the planning total. There is a very considerable increase in capital spending in the health service and also on education. I said that support for voluntary-aided and grant-maintained schools capital will be up by about 10 per cent. in real terms. When we add that to the increases that they had last year, we realise that there is a major programme of capital works in the education services.

Mr. Gavin Strang: When the Chancellor tells the people who have lost their homes and the people who are suffering poverty and demoralisation on the dole that it has been worthwhile to get inflation down, is he not concealing the underlying truth—that all that would have been unnecessary if it had not been for the Government's disastrous financial and economic policies?

Mr. Lamont: The hon. Gentleman seems to think that the recession is confined to this country. I do not know what he thinks is happening in the United States, Canada,

Australia, some Scandinavian countries, and New Zealand. Over the past year, the world economy has grown more slowly than for many years. Many other countries are in recession. The hon. Gentleman is not living in the real world.

Several Hon. Members: rose——

Mr. Speaker: Order. I will bear in mind the hon. Members who have not been called today if they wish to participate in tomorrow's debate.

BILLS PRESENTED

SEVERN BRIDGES

Mr. Secretary Rifkind, supported by Mr. Secretary Baker, Mr. Secretary Heseltine, Mr. Secretary Wakeham, Mr. John Selwyn Gummer, Mr. Secretary Hunt, Mr. Secretary Lilley, Mr. David Mellor and Mr. Roger Freeman, presented a Bill to provide for the construction of a new bridge over the Severn Estuary between England and Wales and roads leading to the new bridge and associated works; to make provision for the levying of tolls in respect of use of the existing Severn bridge and the new bridge; to make other provision for and in connection with the operation of the bridges; and for connected purposes: And the same was read the First, Second and Third time, pursuant to the Standing Order of 18 October, and passed.

EDUCATION (SCHOOLS)

Mr. Secretary Clarke, supported by Mr. Secretary Hunt, Mr. Secretary Heseltine, Mr. John MacGregor, Mr. Francis Maude, Mr. Michael Forsyth, Mr. Tim Eggar, Mr. Alan Howarth, Mr. Michael Fallon and Mr. Robert Atkins, presented a Bill to make provision with respect to the inspection of schools and with respect to information about schools and their pupils: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 7.]

BUSINESS OF THE HOUSE

Ordered,
That (1) Standing Order No. 13 (Arrangement of public business) shall have effect for this Session with the following modifications, namely:

In paragraph (4) the word "eleven" shall be substituted for the word "ten" in line 43; in paragraph (7) the word "eight" shall be substituted for the word "ten" in line 64; and in paragraph (8) the word "two" shall be substituted for the word "four" in line 66;

(2) Private Members' Bills shall have precedence over Government business on 17th, 24th and 31st January, 7th, 14th, and 21st February, 20th and 27th March, 3rd April, 1st May, and 5th June;

(3) Private Members' Notices of Motions shall have precedence over Government business on 29th November, 6th and 13th December, 28th February, 6th and 13th March, 8th May, and 12th June, and ballots for these Notices shall be held after Questions on 13th, 20th and 27th November, 12th, 19th and 26th February, 22nd April, and 20th May;

(4) On Monday 3rd February and Monday 27th April, Private Members' Notices of Motions shall have precedence over Government business until Seven o'clock and ballots for these Notices shall be held after Questions on Thursday 16th January and Thursday 2nd April; and

(5) No Notice of Motion shall be handed in for any of the days on which Private Members' Notices have precedence under this order in anticipation of the ballot for that day.—[Mr. Neil Hamilton.]

Orders of the Day — Debate on the Address

Order read for resuming adjourned debate on Question [31 October].

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Peter Walker].

Question again proposed.

Council Tax

Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.

Mr. Bryan Gould: I beg to move, at the end of the Question, to add:
But humbly regret that the Gracious Speech contains no guaranteed way of ending the Poll Tax by April 1993 and neglects the urgent need to abolish the minimum 20 per cent. Poll Tax contribution levied on the poorest members of society so as to relieve the increased difficulties in collecting the Poll Tax now faced by local government in England, Scotland and Wales; recognise that the proposed council tax combines an unsound valuation process and a banding structure, which takes no account of regional variation, with a personal taxation element or head tax which requires the maintenance of a register of those liable; and deplore the continuing unfairness of a local tax which, by exempting the wealthiest from paying their proper share, forces up the bills for others and fails to provide the stable and fair financial basis that local government needs.
This is a lacklustre Queen's Speech which is remarkable for only one reason. It is the first Queen's Speech in history to be dominated by a Bill that purports to undo the damage done by the same Government earlier in the lifetime of the same Parliament. This Queen's Speech is the work of a Government who want us to believe that they have undergone a deathbed repentance. The pity of it is that the posture is so unconvincing. It is not that the deathbed itself lacks conviction—few can doubt that these are the dying clays of the Government. Nor can there be much doubt about the genuineness of the Government's desire—a desire amounting to panic—to be seen to be washing their hands of t he poll tax. They have even reached the point of using the dreaded term "poll tax" to describe their great error—almost as though steeling themselves to label it correctly at last is the first and necessary step towards exorcising it.

Mr. Robert Adley: On a point of order, Mr. Speaker. I wonder whether the annunciators are wrong. This matter is of great concern to the Labour party, but there are only 10 Labour Back-Bench Members present. Could you check whether the annunciators are working?

Mr. Speaker: There is nothing wrong with the annunciators.

Mr. Gould: I was saying that the use of the term "poll tax" for the first time by Ministers in their press conference last week was presumably an attempt, by labelling the tax by its correct name, to take the first and necessary step to try to exorcise it. They know all too well that the judgment

of the electorate cannot now be long delayed and that a Government with the poll tax on their record cannot hope for much mercy.
There can be no doubt, either, that the Government have a great deal to repent about. The damage done by the poll tax is now too well attested to and too deeply seared into the nation's collective experience to require much by way of elaboration. The evidence of that damage is too damning to be gainsaid by the faint protests of innocence from the Government's dwindling band of supporters.
This is, after all, the tax which has driven millions of ordinary citizens to anger and despair, which produced riots on the streets of hitherto peaceful communities, which forced those without means to break the law and encouraged others to flout it, which broke up families, which induced hundreds of thousands to trade their vote, which cost £14 billion of taxpayers' money—money which should have been spent on health and education—which continues to cost £18 million for every day it survives, which has left local government in chaos and with £1·5 billion of virtually uncollectable arrears, which will require by the end of this year the issuing of 7·5 million summonses, which will clog up our magistrates courts and stretch the police to beyond their breaking point: the biggest debt collection exercise in the history of the world.
It is the tax which has destroyed everything that it has touched, from its original begetter to the very rationale that was advanced to justify it. With comprehensive capping, the poll tax has claimed as its victim the very accountability that was supposed to be its last saving grace, and with that accountability has also gone the Secretary of State's credibility. The right hon. Member for Henley (Mr. Heseltine) condemned comprehensive capping when he was out of office, but he is now compelled by the poll tax to eat his words.

Mr. David Sumberg: In relation to comprehensive capping, will the hon. Gentleman confirm that if there is a Labour Government, he will get rid of all the capping mechanisms that now exist, thus ensuring that all the extreme left-wing Labour authorities, such as Lambeth, Manchester and Liverpool, can penalise and threaten all the people living in their communities? Will the hon. Gentleman confirm that such people will not receive any protection from central Government?

Mr. Gould: I am very glad to confirm that we are opposed to the poll tax in principle because we believe in local democracy. I shall explain a little later why our fair rates bills will necessarily be lower than the bills proposed by the Government.

The Secretary of State for the Environment (Mr. Michael Heseltine): My hon. Friend the Member for Bury, South (Mr. Sumberg) asked the hon. Gentleman a specific question. Will there be provision for capping in any systems of local government finance that a Labour Government might introduce?

Mr. Gould: Unlike the Secretary of State, I shall be precise. There will be no provision for capping in any legislation that we introduce. I look forward to hearing similar precision from the right hon. Gentleman when he is asked questions about his proposals.
As I have said, there is plenty for the Government to repent. However, it is the genuineness of the Government's repentance that is in doubt. We have had no word of regret


or apology from them, only the repellent spectacle of a Government who are trying desperately to shift the blame on to the victims of their errors. We have had no attempt to correct the error at the first opportunity—only vague promises that the poll tax would, at some future date, make way for some almost equally objectionable successor. Worst of all, we have a Government who, with the Local Government Finance Bill, are pretending to put an end to the poll tax, but who are keeping the poll tax and its malign principles very much alive. In fact, the Government are about to put a new poll tax on to the statute book.
We know that the Tory flagship was found to be unseaworthy. We know that there was a mutiny against the captain, who was made to walk the plank, but the attempt to scuttle the flagship has been an abject failure. The poll tax remains afloat—waterlogged, it is true, but still drifting and a danger to shipping. As the mutineers deserted the sinking ship—"mutineers" being a rather more parliamentary term than the one that usually springs to mind when people are described as deserting ships—it has become clear that the new vessel is no more seaworthy than the old. The council tax suffers from exactly the same design faults as the old poll tax, and it is captained this time by someone who does not seem to know where he is or what he is doing.
We should, of course, have been warned. After all, this is the Prime Minister who said of the poll tax:
I don't know what we'll have to do and neither does anyone else.
On that issue at least, the Prime Minister has been as good as his word. This is the Prime Minister who apparently believes that wish is as good as fact, and who told The House Magazine that the poll tax had already been abolished. If the Prime Minister really believes his own propaganda, it is no wonder that he is all at sea on the council tax, Europe, the health service—on everything. In my constituency, the latest joke is to ask, "How does the Prime Minister differ from a supermarket trolley?" The answer is that a supermarket trolley has a mind of its own.
This is the Prime Minister who sought to excuse the poll tax fiasco on the grounds that, to use his own words, it had been "bounced" through the Cabinet. Whatever the truth of that excuse, the right hon. Gentleman was one of the guilty men who then bounced the poll tax through the House of Commons, the Tory party, the local government world and through all the worries and fears which, sadly, turned out to be so well founded.
The Prime Minister was one of those who pooh-poohed all the doubts and difficulties about the poll tax and arrogantly insisted that he and his ministerial colleagues knew best. They and he are at it again. If the poll tax was bounced through, the new poll tax is being smashed through. The preparation for the poll tax was positively leisurely by comparison with the sketchy and hasty pretence at consultation that has proceeded the new measure and by comparison with the draconian guillotine with which we are now threatened, which offers us only half the debating time that was given to the poll tax.

Mr. Robin Squire: The hon. Gentleman has laid some emphasis on constancy. Roughly speaking, how many changes of policy on this subject have emanated from the relevant shadow spokesmen since—I shall be

reasonable—1987, and does the hon. Gentleman still cling to the four-part valuation system that I believe was part of his latest policy earlier this year?

Mr. Gould: The hon. Gentleman has betrayed his ignorance of such matters by giving that date. Our proposals were published in full well over 15 months ago. We have not departed from them. They have been widely accepted and welcomed and we are intent on proceeding towards implementing them at the first opportunity, because they are the only and best way of getting rid of the poll tax.
Returning to the new Local Government Finance Bill, earlier I recalled the assurances that were used to allay the fears of Conservative Back Benchers as well as hon. Members of other parties and people throughout the country when the poll tax was railroaded through the House. We are sure to hear the Secretary of State and his minions make the same assurances and the same arrogant and airy dismissals of people's doubts and fears as we heard when the poll tax made its progress through the House. This time, surely, Conservative Members can have no excuse if they fall for it yet again. They are on notice that a disaster of poll tax proportions is in the making. Their constituents will not listen this time to pleas of "not guilty". What, after all, are they for if not to protect their constituents against the mistakes of government?
However, it is not only Members of Parliament who are under pressure. Local authorities, which are having to struggle with the dying spasms of the poll tax without any relief from the ludicrous irrationality of the 20 per cent. contribution rule, are at the same time having to prepare for a totally new and untried tax, involving a new valuation register, prepared on new valuation criteria, banded according to new principles, and requiring the preparation and maintenance of a new register, new discounts and new rebates, all to be handled by new software as yet unwritten.
It is no wonder that there is increasing scepticism about whether all that can be done in time to issue the new council tax bills in April 1993, irrespective of when the Bill completes its parliamentary passage. It is not only the Opposition who are saying that; so are all the independent experts and institutions, the software companies and an increasing number of local authority treasurers. Their concerns are understandable, and centre on the administrative problems that they will face. Those administrative problems are scarcely affected by the timetable for the legislation. The Government's real reason for pushing the legislation through in such a hurry has nothing to do with the administrative timetable, but everything to do with their own short-term electoral considerations and with the need to clear the decks in case they should suddenly acquire the nerve to face the electorate in March.
It now seems virtually certain that, under the Government's proposals, poll tax bills will keep on coming—not just next year—1993—but in 1994 also. It is no wonder that the Secretary of State, true to form, and realising that his Bill is a recipe for keeping the poll tax alive for another two years, is busily trying to shift the responsibility for yet another failure. That is all of a piece with his characteristic refusal to serve on the Committee, and yet more evidence of his unwillingness to face the music.
The Secretary of State's claim that we may somehow be responsible for delaying abolition of the poll tax is a piece of barefaced cheek from a Secretary of State who seems to believe that the more outrageous his claim the less it will be subject to scrutiny. We yield to no one in our anxiety to get rid of the poll tax at the first opportunity. That is why we have repeatedly offered the Government our co-operation in pursuing the one guaranteed way of abolishing the poll tax by 1993—the enactment of our fair rates proposals.
The Government have turned down that offer, and have insisted on their own proposals. We regret that fact. Nevertheless—I wish to make this crystal clear—we have no intention of delaying the Bill or filibustering during its passage through the House. Indeed, we remain ready to discuss with the Government, at any time, a sensible timetable which will allow proper time for debate without jeopardising the Bill's passage.
We will insist, however, on doing our proper job as an Opposition. This is not just a Bill to get rid of the poll tax. It is a Bill to replace the poll tax with a new tax—a new poll tax—and we are determined to ensure that this tirne the measure receives the scrutiny that it needs. We will not be deterred from proper parliamentary scrutiny by the antics of the Secretary of State. I look to Conservative Members for support in undertaking that important task.
That task is crucial because the new tax is deeply flawed and it inherits many of the most objectionable features of the poll tax. Like the poll tax, it is totally untried and untested. Like the poll tax, it is complicated and difficult to administer. Indeed, by combining a totally new property tax—if one likes, a capital values tax—with the head tax element of the poll tax, it is arguably even more complicated than the poll tax to administer and collect. It will be a tax, in other words, on the roof over one's head and on the heads under one's roof.
We shall pay a heavy price for these complications. The collection costs will be high; the collection levels will be low—certainly lower than in the case of fair rates or the rates of times gone by. Those two factors will inevitably push up the size of council tax bills, just as the poll tax bills were pushed up.
Under the Government's proposals, the bills for average families will also be higher than they need be because of another good old poll tax principle—unfairness. The valuation process and the artificial compression of the valuation bands have many unfortunate consequences, not least for families in the south and the south-east, many of whom will find that they are paying at or near the top level although they live in perfectly ordinary houses.
We shall want to explore those problems with Conservative Members, but when they come to consider banding, they might do well to remember the Prime Minister's statement to the Financial Times on 27 November 1990 just before he became Prime Minister, when he said, "Banding does not work." Does he still hold to that view? Do Conservative Members? Does the Secretary of State? Or is this, like so much else, just so much water under the bridge, to be swept away in the panic to do something, anything, as long as it is not the poll tax?
The real unfairness arises because, as with the poll tax, the best-off people are to be allowed to duck out of paying their proper and fair share. Under the Government's proposals, the ratio of property values in the top band and

the bottom band is 8:1—in the real world it is, of course, much greater—yet the ratio of the highest hills to the lowest bills is only 3:1. The result of excusing the best-off is that hills for the rest of us are necessarily higher.

Mr. Kenneth Hind: Under the hon. Gentleman's proposals, will he maintain the proportion of public expenditure now covered by VAT? Can we therefore say that there will be no change in VAT rates if his system, as opposed to the council tax, is introduced?

Mr. Gould: If the hon. Gentleman had followed these matters at all closely, he would have known that we said exactly that in the debates on the Budget.
We can test the fairness of the council tax by looking at the bill that the Secretary of State himself will face. The Secretary of State is a millionaire. He lives in an expensive house in the heart of London. His bill will be just £273—£100 less than the bill for the lowest value property in Langbaurgh. How can that be fair? I look forward to hearing the Secretary of State defend that concept of fairness.
For all those reasons—administrative costs will be high, collection levels will be low and average bills will have to compensate for the special help given to the wealthy—the council tax bills will be higher than fair rates bills would have been. On average, they will be £67 higher.
The Government's figures—let us for the moment assume that they have an accuracy which the Government's abysmal record on predicting poll tax bills certainly does not justify—show that average council tax bills this year in Langbaurgh would have been £470 and in Middlesbrough £447—£170 and £153 respectively higher than the equivalent fair rates bills. Those figures—the £170 and the £153—represent the surcharge that Langbaurgh families will have to pay for the continued life of the Tory Government. What is true of Langbaurgh is true of the rest of the country.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): Do I take it from what the hon. Gentleman just said that he now has figures for every local authority under his proposals? I do not believe that we have seen them before. Will the hon. Gentleman please lay them on the table?

Mr. Gould: The hon. Gentleman may remember that the chairman of the Tory party professed to be gobsmacked when we produced precisely those figures. There is perhaps a little mystery in these matters. It is now clear that the chairman was gobsmacked because he saw the figures which we produced. It is clear that the Minister of State has remained ungobsmacked because he has resolutely refused to look at the figures which we produced. I shall gladly send him a copy.

Mr. Portillo: What the hon. Gentleman has produced is a meaningless average figure for Great Britain. He has never produced figures for every local authority. That is what we now wish to see.

Mr. Gould: We are beginning to unravel part of the continuing mystery of why the poll tax went so badly wrong and why the new poll tax will also go so wrong. It is because we are confronted by a bunch of ignoramuses who do not do their homework. They do not keep up to date and do not keep abreast of the facts which are put before them. I shall gladly send to the Minister the figures


which we produced—I think, from memory, at the beginning of April—and which had such an immediate impact on his senior colleague and an even more gratifying impact on the electorate, who voted in huge numbers up and down the country for Labour candidates.
We are promised in the Queen's Speech a further local government Bill. At first sight, this offers much more promising ground. It contains some proposals that we accept—indeed, some that we think do not go far enough. We are keen, for example, to ensure that local authorities should make a public response to auditors' reports. Our own "Quality Street" proposals recommend that councils should publish information about standards to be met and their performance in meeting those standards. We shall want to avoid some of the pitfalls of what seems to be a muddled approach by the Government to those questions. For example, we shall table an amendment which would require councils to issue customer contracts of the type pioneered by Labour councils. We have no intention of letting local government off the quality hook.
The disappointment of the Bill is the way in which it has ignored, on the issue of local government structure, the possibility of proceeding by consensus. We favour a local government commission. We want to see flexibility and sensitivity to local needs. But we shall hope to convince the Government—indeed, it is essential that we do so—that a piecemeal, long, drawn-out process which is manifestly open to political gerrymandering and is certain to lead to further confusion is not the best way to proceed.
What we need from the Gracious Speech was an apology for the poll tax and a guarantee to put matters right. Instead, we have an apology of a Bill—the typical work of a Secretary of State who is happier making the airy gesture than doing the hard work. The Bill is hastily prepared, it will be rushed through, it takes enormous risks, it will be unfair, it will threaten civil liberties, it will put local councils under intolerable pressure—yet even then, it will not end the poll tax by 1993. When and if it should replace the poll tax, it will simply reproduce the most objectionable features, the unfairness and the confusion of its hated predecessor.
The new poll tax is a fitting epitaph for a Government who do not know how to say sorry, for a Government who are desperate to run for cover, and for a Government who have run out of ideas and out of time. We and the British people will put the Government and their new poll tax out of their misery as soon as they give us the chance.

The Secretary of State for the Environment (Mr. Michael Heseltine): My hon. Friend the Minister made the point that when the hon. Member for Dagenham (Mr. Gould) rose to speak in this debate on the Gracious Speech, on the vital topic of local government, there were only 10 Labour Members to follow him over the top on such a critical issue. Even when the Labour party Whips toured the Corridors of the Palace of Westminster, all they could drag into the Chamber was about 28 people. The single group of people who have a vested interest in keeping the poll tax on the statute book were gathered together to listen to the tragic case that we have heard this afternoon.
The Gracious Speech covers some of the most far-ranging reforms of local government with which we have had to deal in the House for many a long year. It covers a new regime for local government finance and proposals to set up a commission to consider the boundaries of local government. It includes proposals to extend competitive tendering to a wider range of areas. It deals with the scandal of Labour councillors voting for high budgets and then refusing to pay their fair share of them.
The Gracious Speech is set against the background of the Government entering into a wide-ranging partnership with local government through city challenge and competitive housing investment programmes. We are achieving standards in local government that have never been seriously considered by the Labour party, yet all that we have is a weary parade of inaccurate stories about the poll tax from the hon. Member for Dagenham. We are determined to replace the poll tax at the earliest possible moment, but the Labour party will use every device that it knows to keep it on the statute book.
I can tell the House why the Labour party wants the poll tax to remain on the statute book: it sees it as the only argument that it has left with which to try to fight a general election. If anything was revealed to me this afternoon, it was that the Labour party has no policies to deal with local government. It has no credible alternative for financing local government. It wants to use the poll tax to hide the high levels of extravagant expenditure in which Labour councils indulge.

Mr. Dave Nellist: rose——

Mr. Heseltine: I give way to the arch-exponent of that policy.

Mr. Nellist: Can the Secretary of State explain why schedules 3, 4 and 8 of the council tax Bill provide exactly the same enforcement procedures as apply under the poll tax? Four years ago, the Government abolished imprisonment for debt under the Debtors (Scotland) Act 1987, yet the council tax maintains imprisonment as a penalty in England and Wales. Why the difference? Why keep such medieval barbarity?
Is the right hon. Gentleman aware that one third of the 90 people who served a term of imprisonment in England and Wales were caught by the 20 per cent. rule—30 unemployed people and three on invalidity benefit? Will that happen under the council tax?

Mr. Heseltine: The hon. Gentleman knows that people on the 20 per cent. benefit level were compensated for what they were expected to hand over to the local authority. The 20 per cent. arrangement will not apply to the council tax. The issue for the hon. Gentleman is simple. We were elected to the House to pass laws and to keep within the law of the land. The hon. Gentleman consistently undermines the credibility of the democratic process by refusing to pay legally raised bills, which he then foists on his constituents.
If that is the voice of the Labour party, I challenge its leader to say whether that is the message that he wants spread from one end of the country to the other. His supporters are flouting the law. Is that what the leader of the Labour party wants? [Interruption.] As the right hon.


Member for Islwyn (Mr. Kinnock) will not speak for himself, I give way once more to the hon. Member for Coventry, South-East (Mr. Nellist).

Mr. Nellist: I shall be brief, in deference to my hon. Friends who also wish to speak. Is the right hon. Gentleman aware that, since the introduction of the poll tax, every month and on time I have paid a uniform business rate that is five times the level of the personal poll tax in Coventry? Every month, on time, I have paid my national income tax. My refusal to pay the poll tax will be maintained until the Government introduce in England and Wales what they have already introduced in Scotland—the removal of the barbaric practice of putting pensioners, the unemployed and others in prison for the crime of being poor.

Mr. Heseltine: It is a simple matter. Does the leader of the Labour party think that a Back Bencher has the right to defy a law that was passed by a majority in both Houses? Is that a sign of what Labour, if it were in power, would advocate to the country? I happen to believe that the right hon. Gentleman does not support the views of the hon. Member for Coventry, South-East. It is an open secret. I cannot understand why he does not have the guts to stand up in the House and say so.

Mr. Frank Haynes: The Secretary of State is talking about the Conservative Government bringing in laws and obeying them. What about the previous Secretary of State, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley)? How many times did he break the law? The Secretary of State should get up and tell me that.

Mr. Heseltine: The issue with which the hon. Gentleman must deal is simple. Does he think that he should pay the community charge in his constituency while his hon. Friend the Member for Coventry, South-East does not pay it in his? Is the hon. Gentleman prepared to defend his hon. Friend's position? That is the question and it is one with which the hon. Member for Dagenham did not deal during his speech.

Mr. Thomas Graham: The Secretary of State referred to breaking the law. Is he aware that many Conservatives are telling people to break the law and trade on Sundays? The Tory party gets money from people who recommend breaking the law on Sunday trading.

Mr. Heseltine: I have no hesitation in saying that the law must stand. I defy the hon. Gentleman to say that those who represent the Conservative party in the House are inciting people to break the law.
The issue is simple: it is whether right hon. and hon. Members have a right to take part in a democratic process and then ignore—indeed, frustrate—the conclusions of that process. That is the road to anarchy and it is indefensible. It is one of the ingredients in the legislation with which we shall be dealing and I will want to know whether the Labour party will resist that, as it intends to resist so much of what we are trying to do. We have made it absolutely clear that the poll tax has to go at the earliest possible opportunity. The interesting point is that, every time we try to take positive action to bring about the end of the poll tax, it is the Labour party that hawks itself round the country saying that it cannot be done. It is

trying to undermine the credibility of what we are trying to achieve because it has a vested interest in doing precisely that. The fact is that it will be done. We are going to do it, and we shall do it by April 1993.
Very soon, on Second Reading, we shall have the chance to consider our proposals. They will be exhaustively considered during the usual procedures of the House. The ideas that we have put forward are now clearly understood. There will be a property-based valuation which will broadly reflect the circumstances of the people living in those properties. There will be an eight-band system ranging between a payment of one to three depending on the valuations of the properties.

Mr. Adley: My right hon. Friend will know that, as one who consistently voted against the poll tax, I welcome the Government's commitment to replace the real unfairness of the poll tax and many of the perceived unfairnesses of the previous rates system with the new proposals. However, does he agree that the hundreds of thousands of people who live in mobile homes do not enjoy the sort of property values which equate with the bandings that he has produced? Will he at least say that he is prepared to consider a separate band for people living in mobile homes who really have only the value of the pitch on which they live to represent the value of their properties?

Mr. Heseltine: I know that my hon. Friend has a particular interest in this. All these matters must be fully ventilated in Committee. I do not want that to be taken as saying that we can help in one way or another, but it is important that we should deal with the details in Committee.

Mr. Peter L. Pike: Will the Secretary of State give way?

Mr. Heseltine: No.
The proposals involve issuing a bill on the assumption that a household is occupied by two people. Anybody on full income support will be entitled to a 100 per cent. rebate and there will be a discount for a single person amounting to 25 per cent. of the bill. As the House knows, we shall discount students, student nurses, people on the youth training scheme and apprentices. We shall introduce transitional arrangements in order to help people who face difficulties in moving from one system to another. In those ways, we have carefully designed a system that will be simpler to administer and cheaper to collect. It will undoubtedly be—and already is—widely regarded as fair.
I come now to some of the specific points of the hon. Member for Dagenham. First, I ask him whether he is against banding. Is the concept of banding something with which he can agree? That is an important question, the answer to which I wish to establish in order to discover the differences between our carefully worked-out proposals and the detailed intensive work which is apparently being conducted behind closed doors by the Labour party. Is the hon. Gentleman in favour of or against banding? I think that the House will accept from me that he does not know the answer to that question. There is no answer to whether the Labour party is for banding or not.
I took the trouble to do a little research of my own and I discovered that the hon. Member for Sheffield, Brightside (Mr. Blunkett) has said that the Labour party had no objection in principle to valuation bands. It is interesting that, if one does one's research and reads with care the


Municipal Journal, one can find out what the Labour party thinks. But if one asks the official Opposition spokesman, he does not know.

Mr. Gould: rose——

Mr. David Blunkett: rose——

Mr. Heseltine: I give way to both hon. Members.

Mr. Gould: It is a matter for regret that the Secretary of State seems to suffer from the same weakness as the Minister for Local Government and Inner Cities. The answer to that question, and I suspect the answer to almost any question that he may care to put to us, is provided clearly in the fair rates proposals which, as I said in answer to an earlier intervention, we published 15 months ago. It is the Secretary of State's own look-out if he is too lazy to read that document.
However, since we are on the question of banding and who believes in what, would the Secretary of State tell us whether he agrees with the Prime Minister's statement which I quoted, to the effect that banding does not work? Does he agree with that or not?

Mr. Heseltine: The hon. Gentleman knows full well that my right hon. Friend the Prime Minister supports the proposals that we have made, so he does agree with them. That is the answer to the question. But let me be frank with the House. I want to find out what the Labour party believes in. That is why I stood at the Dispatch Box a year ago and asked the Opposition to come and talk to us. We gave them a chance to consult, to explain. We might even have gone further. They might have helped us to design the proposals. We could not find the answers in the document "Fair Rates". The document is so vague, almost vacuous, that it contains nothing that would enable anybody to draft any legislation. We asked the Opposition to come and talk, but they would not. Now we ask them about banding and the hon. Gentleman obviously does not know. I accept that his No. 2 does know.
We have established that the only real substance against the banding argument is that the Opposition want to put the bands up higher into the valuation range. That is completely consistent with their policy of going back to the rates. One of the only principles left in Labour's financial proposals for local government is an envy tax. They will not raise any money by that, but they want to cane the rich. Having taken 59p in the pound off them in income tax, they want to milk them in another way by introducing more complicated ways of raising more money, and that is in addition to what they intend to do to small businesses in local government, putting the uniform business rate back under the control of Labour authorities. That is a chilling thought to anyone who happens to be living near a Labour-controlled authority. Sadly, there are too many of them——

Dame Elaine Kellett-Bowman: Yes, Iancashire.

Mr. Heseltine: —not just in Lancashire. They now see that there will be higher bands to raise more money from the rich and 59p in the pound in income tax, and that British businesses will be milked for more money for

Labour extravagance. That is where we are beginning to head in Labour's alternative proposals for local government finance.
Let us move on to the figures. My hon. Friend the Member for Enfield, Southgate (Mr. Portillo) has an immense number of virtues and very few weaknesses, one of which is not laziness; it is not a lack of diligence for his task. Nobody knows more about the matter than he does—although, compared with the hon. Member for Dagenham, that is not saying very much. It is known that he knows. The hon. Gentleman says that my hon. Friend has not checked up, but my hon. Friend was right. The hon. Gentleman produced a document which was relevant to the first year of Labour's proposals if we went back to the rates.

Mr. Gould: I was intrigued and amused, as was the whole House, by the Secretary of State's assertion that his ministerial colleague knew and that it was known that he knew. Has the right hon. Gentleman checked that he knows?

Mr. Heseltine: Yes. I spend my life trying to keep up with my hon. Friend, and it is one of the races that I am losing. But he is younger than I am.
Let me continue with the delicate subject of Labour's figures. My hon. Friend has done his homework and he knows, as I know, that the only figures that the Labour party has produced are on the assumption of a return to the rates.

Mr. Gould: No.

Mr. Heseltine: Oh, yes.
I return to the Municipal Journal of 25 October and I shall tell the House how the fair rates proposals are going to be valued. This is what it says:
They have suggested a mixture of capital values, rebuilding costs, repair costs, and rental values.
Before anyone thinks that that is a finite definition of the process by which they have worked out all these figures, and before we get carried away and pinned down into thinking that this is all that accurate, step forward the hon. Member for Sheffield, Brightside (Mr. Blunkett), who told the conference:
We are open to persuasion and to ideas.
That was not 15 months ago or even 15 days ago. It was last week that the hon. Gentleman was saying all that.
Can anyone tell the House how one can pin down the figures that they claim to have published if one has not made up the basis of valuation upon which one is going to do it? Will either the hon. Member for Dagenham or the hon. Member for Brightside, or any Labour Member, intervene at this stage, so that we can understand their logic? [Interruption.] Not from a sitting position—if the hon. Gentleman wants to intervene, he should get off his butt and do it.

Mr. Gould: The Secretary of State is making a valiant attempt to get himself ungobsmacked, but in taking this debate back seven months to a point where we comprehensively established our position to the great discomfort of the Government, the right hon. Gentleman will recall that we enjoyed the support of independent experts, not least the Chartered Institute of Public Finance and Accountancy, for the calculations that we made.

Mr. Heseltine: I know that Labour have been consulting CIPFA, so please can we have the benefit of


that consultation? Will Labour Members explain how the system will work? Of course, we all know that there are no answers to those questions. There is no conceivable way in which anybody could work out what proportion cif what value was about building costs, capital values, rental costs or anything else, because they do not have those figures. Why? They are terrified that they might actually be questioned about the realities of their proposal.
What has Labour done in its fair rates document? Fair rates? I see that the Leader of the Opposition has gone. Quite rightly, he has abandoned ship, and the reason why he has gone is that he could see where I was coming to in my speech.
The leader of the Labour party was describing rates as the unfairest tax that he had ever come across. VVhat is Labour's policy but to go back to them; not for ever, but just for one putative year, while they try to work out some of the details that they have not begun to approach up until now.
Let us move on to the most interesting and constructive intervention in this debate. Labour's proposals—when it has worked them out, costed them, and designed them—will have one absolutely inviolate principle built into them; that local Labour parties can spend and spend and spend as though there is no tomorrow, and in that way there probably will not be a tomorrow. We have it on the record—no capping and no restraints.
The interesting thing about the departure of the leader of the Labour party is that the shadow Chancellor never came at all and nor, to the best of my knowledge, did the shadow Chief Secretary. I think that the Whips had. better go and get them, because we have had another vast extravaganza this afternoon—uncontrolled local authority expenditure, all on the public sector, with no control whatsoever.

Mr. Gould: rose——

Mr. Blunkett: rose—[Laughter.]

Mr. Gould: It is rather unfortunate if Conservative Members are to exploit my hon. Friend's obvious difficulties.
As the Secretary of State is talking about unbridled extravagance as a consequence of not having any capping powers, does he remember his very definite espousal of exactly that position in the article which, from memory, he published in The Times on 9 April 1990? Does he remember his condemnation of any power of universal capping and the very forceful and persuasive grounds on which he made that condemnation? Why has he departed from that principle, or is it another example of the Government, the Secretary of State and the Prime Minister standing on their respective heads?

Mr. Heseltine: It is very simple. We reduced the community charge by £140 per person, and we are determined that it stays for the benefit of the people and is not gobbled up by extravagant local authorities under Labour control. How much worse it would be if the capping regime were taken off, to make it even more certain.
I have nothing but respect for the hon. Member for Brightside. He actually understands these matters and he can add up. His figures make sense—whereas I do not think that the hon. Member for Dagenham can add up. At least, I did not think that he could add up until I heard him

doing a broadcast about his place in the shadow Cabinet, when he was obviously able to add up to determine exactly where he had come. The hon. Gentleman's figuring ability is focused, but not on local government finance.
I have only one final point that I want to draw to the attention of the House.—[HON. MEMBERS: "More."] No, one final point, on the Bill that the House will consider very shortly. It is always complex to design a local government tax and no taxes will ever be popular, so there must be a proper consideration. However, we should all be able to unite in that if the proposals, as the House and another place determine them, pass into law. They will become the law of the land. That is why we were elected to come here. That is why we do not fight it out on the barricades. That is why we do not behave as badly in this country as others with less sophisticated parliamentary systems do. We have learnt.

Mr. Gould: What about a speech?

Mr. Heseltine: The hon. Gentleman asks, "What about a speech?" What about a principle? What I want to know is very simple. When we get to that part of the legislation which takes away from Labour councillors who do not pay their bills the right to vote on matters that affect the budgets of their councils, will Labour vote against us or will it not?

Mr. Gould: Of course we will.

Mr. Heseltine: I heard the answer, even though it was from a sedentary position—"Of course we will vote against."

Mr. Gould: As the Secretary of State is so concerned on. all occasions to devote his time to our position, let me make it clear, in case he is yet again unable to comprehend the simplest proposition, that we made it plain on the very day that he made his rather bravura statement to the Tory party conference—not, I might say, to the House—that we would support those measures and that particular part of the Bill. There has never been any mystery about it. I am sorry to deny the Secretary of State his great peroration.

Mr. Heseltine: We had all the poll tax demonstrations and no complaint from the Labour party. We had all the "Won't pay" councillors and no complaint from the Labour party. We had hon. Members saying that they would not pay and no complaint from the Labour party. There was defiance of the law. The Tories stand up and do something about it and then they come in and agree that we were right. Why did they do nothing to discipline their own councillors and Members of Parliament? In the end, it is always the Tories who have to take the difficult decisions. It is always the Tories who have to deliver the quality of service and to keep control over public expenditure. All we get is trivialisation, exploitation and incitement from the Labour party—frightening innocent people with their claims and counter-claims. We will have no part of it. They are an Opposition and bad at that. We will never give them a chance to be a Government and bad at that.

Mr. Allen McKay: Of the Secretary of State's performance—and it was a performance—I can only say that he treated the House as


an extension of the Conservative party conference. How wise Conservative Members were not to choose him as their leader.
Yesterday we debated rights, freedoms and responsibilities. In fact, that theme runs right through the Queen's Speech and our debates on it. All these matters are important to my constituency: the right to work, the right to education, the right to a free national health service, the right to walk around without fear, the right to an adequate standard of living after retirement and the right to fair remuneration while in work. Those rights complement each other, combining to provide the quality of life to which people are entitled.
If that is to happen, however, the right policies must be implemented, both nationally and locally. That applies to Government policy on employment and education, for instance. My area also needs to continue its industrial development by extending existing workplaces and attracting inward investment. It needs to rebuild its economy, and thus offset the unemployment that has been caused by the policies and beliefs of the present Administration.
I do not wish to be churlish and fail to recognise the help that we are now being given. There is, however, a long way to go before we can replace the thousands of jobs that have been lost, and repair the resulting damage to the local economy. Since 1979, the so-called reconstruction of the coal industry has brought about rapid and continuing colliery closures. My constituency, once the centre of the Yorkshire coalfield, now has no collieries within its boundaries, although mineworkers travel to other coalfield areas. The problem has been compounded by the restructuring of the steel industry.
As a consequence, unemployment in my area is twice as high as the national average: it is now at 14 per cent., and is still rising. Meanwhile, crime is also on the increase, which is not helped by the under-financing of our hard-pressed police force. Our fire service chief recently warned the Government that the underfunding of the service would cause another fall in manpower; he has subsequently told them that the current strength of the service is below the Home Office requirement.
The Rothschild report contains proposals for the reduction of the coal industry to about 18 collieries, in preparation for privatisation. Government thinking appears to confirm that intention. The Coal Industry Bill raises the limit on grants to about £2,500 million—possibly up to £3,000 million. That amount just happens to coincide with a reduction in manpower of 40,000-plus, in line with the Rothschild report.
What measures will the Government take to deal with the devastation that those redundancies will cause to the coalfield communities? One way of helping them would be provided by the RECHAR money which, although it is available in Europe, the Secretary of State is denying to local authorities, for purely ideological reasons. The Government are simply being intransigent. The money was intended to go to the coalfield communities; it was not meant to go where the Government want it to go.

Mr. Martin M. Brandon-Bravo: I know the hon. Gentleman's integrity, and I am sure that he does not intend to mislead the House. If given the opportunity, however, my right hon. and hon. Friends on

the Front Bench would tell him that the European Commissioner came here some months ago, agreed with three Secretaries of State on how the RECHAR money could be distributed and was content with the arrangements in Britain. Only after he returned to Brussels did he change his mind. It is not the Government who are delaying the payment of the RECHAR money; it is Bruce Millan in Europe. That is the truth, and the hon. Gentleman should accept it.

Mr. McKay: It is not true. In any case, the Secretary of State has just been lambasting us about compliance with the law. Commissioner Millan has acted in accordance with the law of the EC and the rules of distribution. He is not stopping the payment of the money; the Secretary of State is doing so, purely and simply because the areas identified by Millan and his committee are not acceptable to the right hon. Gentleman. The money is available, but the Secretary of State is helping to prevent the rejuvenation of the coalfied areas. The money would help tremendously—although, of course, further action would still be necessary.
The Government also plan to take steps that no Government should take, irrespective of politics. They plan to revoke the 1908 legislation and to allow any future mine owner to increase the permitted hours of working and to brush aside the years of struggle that it took to regulate the health and safety arrangements and protect miners from unscrupulous mine owners. The legislation should not be revoked without being replaced by adequate protection measures.
The Secretary of State for Energy should make a statement about what the Government intend to do in the event of privatisation of the mining industry. Who, for instance, will supply concessionary coal to pensioners, employees, widows and redundant miners? Will the cost be met by the new owners or by the Government? What will happen to the payment of cash in lieu of fuel allowance? What provision will be made to continue existing pension rights for retired mineworkers, their widows, pneumoconiosis sufferers, future pensioners and those who have been party to redundancy agreements? Will the new owners make those payments or will the Government?
Will those people be sold down the river, as the employees in the sold-off skill centres have been? Astra workers, despite assurances from the Government and the Secretary of State that their civil service retirement and redundancy agreement would be honoured, are now being given a take-it-or-leave-it choice: they can sign away their rights under the new agreement or they can be given the sack. Some of my constituents stand to lose some £27,000.
What is to happen to the £11·5 million that was given to Astra to retain those civil service pensions? Will the Government take it back, or will they allow it to go to the Astra management?

Mr. Deputy Speaker (Sir Paul Dean): Order. Let me remind the hon. Gentleman that, unlike the earlier debates on the Queen's Speech, today's debate is on an amendment, to which the hon. Gentleman's remarks should be addressed.

Mr. McKay: I mean no disrespect, Mr. Deputy Speaker, but we are debating the Queen's Speech, are we not?

Mr. Deputy Speaker: There is a distinction between the early days, when we debate the whole of the Queen's


Speech, and days such as today, when we are addressing an amendment. Today's debate is more restricted than previous debates.

Mr. McKay: With respect, Mr. Deputy Speaker, I have always understood that, as the debates on the Queen's Speech actually constitute a single debate, the contents of the speech are debatable throughout. If I am wrong, I stand corrected.

Mr. Deputy Speaker: Let me repeat what I have said. In the early days, when no amendments have been selected, our debates are on the Queen's Speech, and any subject is therefore in order. Today, however, we are debating an amendment, to which the hon. Gentleman should address his remarks. The same will apply tomorrow if amendments are selected.

Mr. McKay: Thank you, Mr. Deputy Speaker. I accept your ruling; I had forgotten about the amendment.
I hope that central Government will stop their vendetta against local authorities. Local government consists of the people on the ground who are trying to deal with the problems that have been created by central Government, including the increase in crime.
The Secretary of State's failure to deal realistically with my authority's standard spending assessments should urgently be reassessed. I have been a Member of Parliament for nearly 14 years. During the whole of that time, no Secretary of State has refused to meet a delegation led by me. However, when I approached the present Secretary of State for the Environment and asked him to meet a delegation led by me regarding the new council tax, he refused. I accept that he asked the Minister for Local Government and Inner Cities to meet us, but it was wrong of the Secretary of State to refuse to meet directors of finance of seven local authorities to discuss the standard spending assessments, how the poll tax affected their authorities and how the new council tax is likely to affect their areas. That should not happen again.
The Secretary of State's failure to deal realistically with the authorities is causing a great deal of trouble. The Secretary of State referred to bad, left-wing local authorities and to capping. Local government has never overspent. I accept that the Government set the targets for overspending. Since 1979, however, the Government have denied local government its proper share of finance. Each year, they have reduced the grant. It was 72 per cent. It is now 33 per cent. Local government therefore had to find the money from somewhere else. The only way to do so was by increasing the rates. That resulted in the Government's introducing capping.
Local authorities are doing exactly what the people in their area want them to do. My authority has been Labour-controlled for 52 years. The authority has 60 Labour councillors and three others, two of whom are Conservatives. Those Labour councillors are elected year after year. How can they not be carrying out the wishes of the people in the area if they are returned to office? The authority is regarded as overspending because it is a low-rated area. The rates have therefore been increased by much more than the Government wanted. The directors of finance wanted to talk to the Secretary of State about that, but he refused to meet them.
Capping has an effect on local government services. If we want to regenerate the economy, we ought not to have capping. The local authority already spends 65 per cent. of

its income on education. Our education programme, however, ought to be geared to the regeneration of the area. Capping ought to be stopped so that money can be raised in accordance with local authority requirements. In 1974 the authority decided to introduce nursery education throughout its area. That had to stop when the authority was capped, with the result that only half the area is providing nursery education. That part of the area which is without nursery education wonders when it is going to be provided. All I can tell the people in that part of the area is that, as soon as we get rid of this Government, they will have their nursery education.
In an effort to attract sufficient money to meet its statutory obligations, the authority had to axe all its adult leisure activities—300 courses. That affects the unemployed and the elderly in particular. I wanted the Secretary of State to meet the local authority so that that case could be put to him, but he refused.
The council tax will not work. If the Government's assessment of the money that will be raised by means of the council tax is wrong, where will it be found? Do they intend to ask local government to raise the amount of money locally without capping or by setting capping at a higher rate? Some property in my area has been adapted for use by handicapped people. If a broad assessment of an area is made for council tax purposes, how can those properties be identified? All the houses look alike. All these matters will have to be considered in Committee. If, however, there is insufficient time to consider them in Committee, because of the guillotine, we shall face the same difficulties as we experienced with the poll tax.
Today, the Secretary of State used the same arguments about the new council tax as the right hon. Member for Cirencester and Tewksbury (Mr. Ridley) used when he introduced the poll tax Bill. The right hon. Gentleman said that it would be fair; it was not. He said that it would be easy to collect; it was not. He said that it would not be expensive to collect; it was. All that the right hon. Gentleman said during the passage of that Bill has been disproved. We are suggesting, as we suggested when the poll tax was introduced, that, rather than rush the council tax Bill through, we should return to the rateable value system so that all the parties can get together and introduce a proper system by means of which local government can raise the money that it needs. We should not rush bullheaded at it and make as much of a mess of the new council tax as we did of the poll tax.

Mrs. Elizabeth Peacock: I am delighted to have the opportunity to say goodbye to the community charge, or to the poll tax as it became known. It is well known in the House that I did not support the Bill that introduced the community charge. I felt that it would be disastrous, particularly in my area of Yorkshire and for the majority of the people whom I represent. Some of them did gain, but the majority lost. The poll tax turned out to be a disaster.
My constituents and I welcome the £140 reduction that the Government have introduced this year. It made a tremendous difference to the amount that my constituents had to pay to the local authority. I also welcome the capping powers that will protect people from excessive council spending. I am amazed, however, that the hon. Member for Dagenham (Mr. Gould) said clearly that


Labour would remove all the capping legislation, thereby giving the opportunity to many Labour-controlled authorities to spend even more. I hope that my constituents in Batley and Spen are listening to the debate. Their authority is Kirklees. The one thing that they do not want is the reins to be taken off Kirklees. They cannot afford the bills that they now receive from Kirklees. If capping is removed, my constituents will be unable to afford all the money that Kirklees will want to spend.
I welcome the introduction of the new council tax, which appears to be much more reasonable to the majority of my constituents, as well as to many other people. However, I shall monitor closely the Bill's progress in Committee to ensure that there are no hidden bits that I have missed. I also welcome the extensive rebate scheme of up to 100 per cent. for those on low incomes and the scheme of transitional relief to protect people from any excessive increases during the switch from the community charge to the council tax.
I note that students' halls of residence will be exempt from the tax, as will student nurses on Project 2000. I know that that will be greatly welcomed because many people involved in such areas felt that it was unfair that they should have to make a contribution to local services, even though they may have used them, at that stage in their lives.
I welcome the provisions to bar councillors who have not paid their community charge or council tax bills from voting on the level of spending in their authority. I was brought up with the principle that one cannot have rights without responsibilities. In such circumstances, one has to pay a tax if it is the law of the land; otherwise there should be no right to vote on the level of spending.
If the council tax had been in operation in 1991–92, no council in England that was spending in line with the Government assessment of the standard level of spending would have had to charge more than £267 for a two-person household in the bottom property band. Under the community charge, the authority in Kirklees wanted to charge £750 for a two-person household. The Government's £140 reduction per person has still left those households with a bill of over £500, which is a tremendous amount of money. The new council tax will make a great difference to such people.
Second homes have always presented a problem. It is not always a matter of someone being able to afford to have two homes. Often it may be a vicar who is approaching retirement and who lives in a manse but will need somewhere to live when he retires. Obviously, the Church will want his property back immediately. It may be someone unable to sell a house after an elderly relative has died. The new arrangements say that a property that is not someone's sole or principal residence will be liable for half the bill. That reflects the property element of the tax and I am sure that it will be welcomed.
There must be some charge on empty properties because the owners will still expect some local services. They will expect the roads to be repaired, the fire brigade to come if there is a fire and the police to protect their property if there is a break-in.
Houses in multiple occupation have always been a problem and the community charge has not been easy to collect in such properties. Therefore I welcome the fact

that the owner of such a property will be subject to the council tax and that it will be up to the owner to decide how much is passed on in the rent to the people who live in the property. It will make the tax much easier and cheaper to collect, particularly in student areas and cities where there are many flat dwellers. In such areas, a great deal of tax has gone uncollected in the past.
It is difficult to comment at this stage, because I must admit that I have not perused the Bill line by line as perhaps I should have done. However, I can assure my right hon. and hon. Friends on the Front Bench that I shall do so shortly. If I find that there are any little bits that I do not like, as in the past, I shall be quick to point them out. However, at this stage, I can give a warm welcome to the new council tax because it will be a great help to people in my constituency and in the north of England where I know properties better than I do in the south.

Mr. David Bellotti: We were "entertained" by the Secretary of State, whose comments, sounded more like an after-dinner speech than an intelligent exposition of an extremely important Bill. I noticed that the Secretary of State left the Chamber less than an hour after the start of the debate. Also, the right hon. Gentleman was not present during the debate on the important matter of the capping of local authorities, which was before the House recently. His interest in the subject before us is limited and he revealed today that he does not have a unique grasp of the detail of the Bill. In fact, I wonder whether he has read it. It was fair for the Secretary of State to say that most of the knowledge resides with the Minister for Local Government and Inner Cities, but it is a matter of regret that he is not present to hear this important debate.
The majority of people in this country and in the House know that the rates were discredited. The system was unfair because it fell upon people who were unable to pay. Also, the majority of people know that the poll tax was unfair, although many in the House arrived at that conclusion rather late in life. Now, the Government are giving us a combination of those two most unfair local taxes. The poll tax has become discredited and has had to go, in the same way as the right hon. Member for Finchley (Mrs. Thatcher) had to go. The two issues are related.
The poll tax cost the country millions of pounds to introduce. That money would have been better spent not on administration but on services that our local communities desperately need. It has left millions of pounds of local taxes uncollectable and that money will never be seen. Local government will have to raise it in other ways if it is to pay for the important services.
The Government say in the Bill that students and those on income support should not pay local taxation. If that is so, why do we not have before us a Bill that includes the abolition of the 20 per cent. contribution to the poll tax from 1 April 1992? There can be no excuse for the lack of such a provision if the Government are asking us to accept the provisions in this Bill from 1993. Even at this late stage, will the Government consider abolishing the 20 per cent. contribution from 1 April 1992? It costs so much for local authorities to collect that abolition would make good financial sense as well as being fair to those most in need.
There is one system of local taxation that is used in many countries across the world. It is cheap to administer,


easy to collect and, most important, related to the ability to pay. That system is a local income tax. We know that such a system could be in place by April 1993. The information that is needed is contained already in the Inland Revenue computers, and a programme could be introduced within six months. It has been proven in use in other countries and the Government should consider it seriously. They have not done so. Although I regret that, the debate must centre on the Government's proposals.
The proposals for the council tax hinge on valuations. We are to see a repeat of the costs of introducing the poll tax. The Government admit in the Bill that it will cost £250 million to introduce the council tax. About 500 extra staff will be needed in the valuation offices and tribunals. Even with all the extra staff and at such a huge cost—money that could be much better spent on services—the detailed valuations will be hit or miss. Clearly, it is not intended to assess every house and dwelling individually. In many cases it will involve somebody standing at the end of a street deciding that all the houses in that street will fall into a certain band.
The bureaucracy will be the same as that involved in the poll tax. The Secretary of State said some time ago that there will not be a register for the council tax. However, it appears that there will be a list. I should like the Secretary of State to tell the House the difference between a register and a list. Those who wish to apply for a discount will have to fill out a form, and their details will be compiled in some list or register. At the end of the day, the Bill will give the public the right to examine——

Mr. Eric Illsley: The hon. Gentleman has made an interesting point about a list or register. Can he give his opinion on how he thinks that the Government will compile such a list, and the time scale involved? Will local authorities produce a list before the service of the first bills or will they compile it after the first bills have been issued and when people come back to the valuation officers with their complaints and to ask for their discounts? How will it fit into the time scale?

Mr. Bellotti: The hon. Gentleman makes a telling point. The Government have not answered many points of detail. The Secretary of State made a fairly long and amusing speech, but it was low on content because he has not thought the issue through. I am sorry that I cannot share my view on the issue with the hon. Gentleman; we shall have to wait and see what the Government have to say on that and other important issues.
Under the Bill, people will be able to take copies of the valuation list and third parties will be forced to reveal information. It would appear that if those who are compiling the list believe that they can obtain information about the value of a property, they can write to, say, National Westminster bank and it will be required to supply that information within 21 days. If that is what the Government intend, they are breaking new ground.
The Bill gives a valuation officer the authority to call on a household in the middle of the night. If he puts a note through a door to say that he will be back in just over 24 hours, the owner of the property or the tenant must: allow him in. A call can be paid in the middle of the night with only 24 hours notice being given. One wonders whether that is the Government's intention; I hope that it is not.
Appeals against the valuation band will be held in public. The general public will be able to file in and obtain subsequent information on the outcome of the appeal.

Mr. Simon Burns: The hon. Gentleman seems to be going on about personal privacy. Am I not right in thinking that one of the disadvantages of a local income tax is that everyone's privacy will be invaded, because town halls will have the personal income details of every individual eligible to pay the local income tax?

Mr. Bellotti: I am extremely grateful to the hon. Gentleman, because he gives me an opportunity to explain how the income tax would work and to give him the categorical assurance that no town hall would have details of a person's income. The local authority will set the local income tax in exactly the same way as it previously set the rate. That will be communicated to the Inland Revenue, which already has confidential information about national taxation on its computers. If we assume that the local tax rate across the country is 3·3 per cent., that would be added to 25 per cent. and 28·3 per cent. would be deducted under the PAYE system. It is extremely simple.

Mr. Burns: rose——

Mr. Andrew MacKay: rose——

Mr. David Wilshire: rose——

Mr. Bellotti: It is extremely simple, and I am grateful to have the opportunity to explain it. May I commend hon. Members who would like more information to visit some of the many countries that operate a local income tax, because they would be enlightened?

Mr. Burns: Am I right in thinking that the Inland Revenue will add an average of 3·3 per cent. to the 25p standard rate of income tax, collect that under PAYE and then pay it to the local authority? If so, surely it would not take a sophisiticated mathematician to work out, if anyone were so inclined, the income of each individual who is paying the local income tax.

Mr. Bellotti: I am extremely grateful again. The total is passed to the local authority. It is not passed with a list of what individuals have contributed—that defeats the whole point of it.

Mr. Brandon-Bravo: rose——

Mr. Bellotti: I shall not give way again because I want to refer to the local income tax later. Only five Conservative Members were present earlier; I am glad that my speech is encouraging them to come into the Chamber.
I want to deal with the clauses that are vindictive. A councillor who is two months behind with payments of the council tax will be required to declare that and will not be allowed to vote at a council meeting. I can think of nothing more ludicrous than someone who is one month and 29 days behind with his payments being able to vote at a council meeting while someone who is two months and one day behind has to remember to declare that and cannot vote. Have the Government thought through how this will work? The Bill puts the onus on the councillor to remember whether he or she is more than two months behind. It is a crazy and vindictive proposition.
A second area of vindictiveness is the attachment of earnings. The Government will attach the earnings of anyone who has not paid the council tax. When I referred


to the local income tax earlier, I might have expected grumbles about employers having to collect it, but if there is no objection to employers collecting local taxes, what is the objection to the local income tax, which they would collect?
Under the Bill, there is to be a 25 per cent. discount for a single household. The Government always seem to get their maths wrong. If a standard household has two people, and if the Government want to be fair, one as a fraction of two would lead to a 50 per cent. discount.
As with the poll tax bill, the phrase "jointly and severally liable" appears in the Bill. How fair can that be? Surely, under a property tax, the person who owns or rents the property is taxed. Other occupants should not be taxed jointly and severally. The person who rented or owned the property may have moved or split from their partner, yet the remaining partner will be liable for the ex-partner's tax. That is hardly fair.
The whole Bill is unfair. A wealthy single person living in a big country mansion may pay less than a pensioner couple who are spending their retirement in a high-value bungalow on the south coast of England.
Some hon. Members applied to discuss the future financing of local government with the Secretary of State but we were denied an audience. I asked the Secretary of State or the Minister of State to meet the two local authorities in my constituency—Wealden district council and Eastbourne borough council. One is run by the Conservatives and the other by the Liberal Democrats. That request was refused. The hon. Member for Barnsley, West and Penistone (Mr. McKay) had a similar request turned down.
Are the Government not prepared to meet local authorities to discuss the financing of local services? Will this be the standard answer that hon. Members get? Perhaps the Government are trying to cover up what will happen when the council tax takes effect in April 1993.
I must tell the Government that their proposals will win little support in Eastbourne. The rates in Eastbourne were unpopular because of the high value of houses. The poll tax was unpopular. A two-adult household in Eastbourne of one earning and one non-earning adult paid £274 each—a total cost of £548. Under the council tax, the average value of a house in Eastbourne would fall into band C—a total cost of £390. Under the local income tax, a youth worker earning £16,134 would pay £322·45p, with a non-earning partner or spouse paying nothing.
In nearby Lewes, the position is even worse. Under the poll tax, a similar household would have paid £245 each in poll tax, a total of £490. Under the council tax band E the average bill in Lewes, where average house prices are higher, would be £444. Again, however, under a local income tax a youth worker in Lewes earning £16,134 would pay just £255·74, with the non-earning spouse paying nothing.
In local authority after local authority, the council tax will be unpopular. In some places, it will not be an improvement on the poll tax and in others the improvement will be only marginal. The Government have clearly not done their sums—they have not worked out what its effect will be.

Mr. Brandon-Bravo: The hon. Gentleman uses as an illustration someone working in Eastbourne and someone

working in Lewes. The House is anxious to know whether the collection of tax by employers is relevant to where people work or to where they live. The young man working in Lewes may live 50 miles away, for all we know, so will the hon. Gentleman deal with the problem of how on earth the local authority will know who works where? Local authorities do not have that information at the moment. If the tax is not based on where people live, how will the money eventually end up with the local authority in which they live? How will a local authority know how many working people live within its area?
The hon. Gentleman's party has not thought about any of those issues. He says that such a system works in other countries. His party's spokesman in another place refers to local taxation in Canada and in the United States. California is the size of this country and some of the Canadian provinces are 10 times that size. Can the hon. Gentleman relate that to a local income tax in the United Kingdom?

Mr. Bellotti: I am again extremely grateful for that intervention. I shall not take any more interventions, as I am coming to the end of my speech and many hon. Members wish to speak.

Mr. Andrew MacKay: I enjoyed it.

Mr. Bellotti: I enjoyed it, too.
I am grateful to the hon. Member for Nottingham, South (Mr. Brandon-Bravo) for his intervention. A local income tax would work according to where a person lives. The Inland Revenue has the necessary information on its computers, because it has everyone's postal code. Only this summer, I went to the Inland Revenue offices to check, and the postal codes are on the computer. Every local authority knows exactly which dwellings are in its area so, by matching the postal code to the authority, all the money would go to the right local authority. I am grateful for the opportunity to enlighten the hon. Gentleman, and I thank him for his question.
There has been an overestimation of property prices in the Government's thinking. Since the Government first thought of the council tax, property prices have fallen, so the income generated will be less. The effect will be that the eventual figure for the poll tax—now the council tax—will be greater. There will be millions of losers who live in high-price property who enjoyed the poll tax but will now pay much more under the council tax. Many of them are in the south of England, in seats held by Conservative Members of Parliament.
I should like a response from the Minister about the proposal to privatise the revenue collection service in local government. Colleagues in local government have been saying for some time that the Government have said that, at some point, the revenue collection services in local authorities Would be privatised and would go out to tender. I seek an assurance that that will not be for at least three or four years after the introduction of the council tax. If it were introduced before that, it would cause absolute mayhem in town halls.
The Bill refers to the collection costs, which the Government have estimated at 40 per cent. of the cost of administering the poll tax. However, the Audit Commission has challenged that figure, and has said that it would be nearer 50 per cent. The Bill refers to £200 million a year being saved on the cost of collection, but it does not mention whether that £200 million is a saving on


the cost of collecting the poll tax or on the cost of collecting the original rates. The Government introduced the discredited poll tax, which cost an enormous amount to collect, so there is not much joy or credit if the new system still costs more than the original system.
Instead of the council tax and the unclear proposals, it would be far better to introduce a system that will work. Let the local authorities control, for example, the business rates; let us remove all the capping powers and increase the quality and accountability of locals services by making people locally responsible to those who elected them. With less Government interference, more local competence will emerge.
In Committee, we shall consider every detail of the Bill and we promise to consider carefully every clause. We want to ensure that people are not landed with a second taxation system which is as unfair and unjust as the poll tax.

Madam Deputy Speaker (Miss Betty Boothroyd): I call Mr. Allen McKay.

Mr. Andrew MacKay: We have already heard Allen, and he cannot speak twice.
I do not wish to appear uncharacteristically churlish, but I wonder whether I alone raised an eyebrow when the hon. Member for Eastbourne (Mr. Bellotti) questioned whether the Secretary of State should have left the debate after an hour when the hon. Gentleman has been the only member of his party to be here throughout the debate—until the hon. Member for Liverpool, Mossley Hill (Mr. Alton) scuttled in towards the end of his speech. Wisely, he missed the first half, but sadly, the second half wa.s not a great improvement.
I commend the hon. Member for Eastbourne on one half of his speech. He quickly glossed over Liberal Democrat proposals on local income tax and rightly stuck to debating the official Opposition's amendment. It was clear from the telling interventions of my hon. Friends the Members for Chelmsford (Mr. Burns) and for Nottingham, South (Mr. Brandon-Bravo) that there are many unanswered questions.
The only question that the hon. Gentleman answered clearly—I am grateful to him for that—was to the effect that there would be no capping under Liberal Democrat proposals. So, if we had local income tax, however it might be collected and whoever it might be collected from—wherever people happen to live—there will be no limit on the tax, which means that a profligate local authority could levy huge sums. That was fascinating to learn. But that is enough about the Liberal Democrats' local income tax.

Mr. David Alton: The hon. Gentleman must understand that in a city such as Liverpool this has been a serious issue. If the poll tax or rate cappers had been the people themselves, that city might not have run into the problems that it experienced. Militant might not have been given the opportunity to blame the Government if there had been far more local accountability. That is why my hon. Friend's point was well made.

Mr. MacKay: There were problems in Liverpool before rate-capping was introduced, but I shall not be diverted

from the amendment because we wish to consider carefully what the hon. Member for Dagenham (Mr. Gould) said when he moved it.
Perhaps the Labour party has been out of office for too long; it has forgotten what government is about. It has forgotten that it is about making hard decisions and that there are complex problems associated with the raising of income for local authorities. I presume that that is why in the past four years the Labour party has come up with 70 different policies.

Mr. David Amess: Is my hon. Friend sure?

Mr. MacKay: It was very difficult to decide what the hon. Member for Dagenham had in mind, even when he was being prompted by the hon. Member for Sheffield, Brightside (Mr. Blunkett).
All of us who have studied the problems over the years can point out the shortcomings of alternative policies. As I said in the previous debate on the subject last year, what was required was to combine the best of the old ratings system with the best of the poll tax, or community charge, and local accountability. That has been achieved in the council tax and I strongly support it.
You may recall, Madam Deputy Speaker, because you were in the Chair during that debate, some of my reservations about the poll tax, which have now been addressed satisfactorily by the Government. I said that it was nonsense to collect 20 per cent. poll tax from students. It is unfair to the students concerned, and the cost of collection outweighs the money that comes in. I am delighted that, when the council tax is introduced, there will be no charge for full-time students.
I also expressed concern about some of the poorest in our community who found it difficult to pay even 20 per cent. of the poll tax. I know full well that, in effect, they are not paying that, because they have gained increases in social security which offset the 20 per cent. that they pay. But that is not good accountability. The real problem is that those people often spend the money in advance and then find it difficult to raise the sum when required. I am, therefore, delighted that the rebate will go up to 100 per cent. for the least well-off in the community.
The third group that worried me when I spoke before were the families in my constituency in which the breadwinner or breadwinners were on a low income which was not sufficiently low to be eligible for community charge benefit. Almost inevitably, most of those people live in properties of relatively low value. Under the council tax, they will pay less than they were paying under the community charge, and that is right. There should be some element of ability to pay. I am satisfied that the banding system is sufficiently wide so that those who live in houses of a higher value will pay somewhat more for services which they can clearly afford.
The reason why I was so opposed to the old rating system and why I campaigned for so long to have it changed was the blatant unfairnesses, especially for single people, whether they were young people starting out in life or pensioners, widows or widowers, living on their own. They had to pay the same as their neighbour who lived in an identical house. We have all heard that argument before and it is correct. It was wrong that such people should pay the same, so I am delighted that there will be a full 25 per cent. discount on the council tax for single people.
The first most serious flaw in Labour's proposals is that there is no discount for single people, so that widows and old single people will pay the same under Labour's so-called fair rating system as will their neighbours in identical houses. That cannot be right, and I hope that all those single people are well aware of Labour's proposals.
Labour's proposals share their second great flaw with the proposals of the Liberal Democrats. I was pleased that my hon. Friend the Member for Bury, South (Mr. Sumberg), aided and abetted by my right hon. Friend the Secretary of State, flushed out from the hon. Member for Dagenham the admission that there would be no capping. If there were a Labour Government, or a Labour Government aided and abetted by the Liberal Democrats as we had between 1974 and 1979, there would be no capping. That meant that for every irresponsible council such as Liverpool council, against which the hon. Member for Liverpool, Mossley Hill (Mr. Alton) fought so courageously, the sky was the limit.
I am amazed that the hon. Member for Mossley Hill can go along with that idea because he has considerable practical experience in Liverpool of what life is like for his constituents if there is no capping. That is now Liberal Democrat policy and it is Labour policy.
We should not have needed to debate the issue tonight if, on day one of the community charge, there had been the 2·5 per cent. increase in value added tax which had led to £140 reduction per head in poll tax. Like colleagues in other parts of the country, I have found that in my constituency it was not the principle of the community charge—except for the anomalies that I have just mentioned—that concerned people and lost public opinion, but the size of the poll tax bills.
From knocking on doors in my constituency, I have found that, although the poll tax was a great issue until 18 months ago, when in the Bracknell end people were paying £396 and in the Windsor end they were paying £450, following the reduction of £140 and with prudent spending by the local councils—the poll tax is now £230 in Bracknell and £287 in Windsor—it is no longer a major issue. That is deeply significant and it is a great pity that, when the poll tax was introduced, the increase in VAT did not take place. If it had taken place, we could have amended the anomalies such as discounts for students, and we should have had no problems.
It is only because the poll tax is holed below the water-line in public credibility that we need to move to the council tax. The council tax offers the best compromise between the two previous systems of rates and of poll tax. We have the best of both worlds without the worst of either.

Mr. Pike: Does the hon. Gentleman accept that in my constituency, as in many constituencies in which there are low rateable values, many pensioners living alone find it strange and inconsistent with the Government's claimed policy of getting rid of the rates, and going on to the poll tax and now the council tax, that, as a result of the concession on low rateable values, a single pensioner living alone often pays more poll tax as an individual than do two, three or four individuals living next door? People living together tend to get more relief in lower rateable

value properties. How does the hon. Gentleman justify that, when one of the Government's original claims was that the poll tax would help single pensioners living alone?

Mr. MacKay: As the hon. Gentleman knows, single people on the whole have been helped immensely by the community charge and they will be helped by the council tax as well. Much depends on the amount of relief that is given. As I have already pointed out, up to 100 per cent. relief will be given to those on the very lowest incomes to whom the hon. Gentleman referred. That has been satisfactorily addressed under the council tax and the hon. Gentleman should appreciate it fully.
I shall explain how satisfactorily the council tax will work in Bracknell and Windsor. The average house in Bracknell comes under band D. Band D will be charged £367 compared with the £230 a head which we pay at present under the poll tax. The figure was £396 before the reduction due to the VAT increase in this year's Budget. In Windsor, where the largest single band is band E—25 per cent. of people are in that band—people will pay £495 council tax for a house compared with £287 a head poll tax. The figure was £450 before the Budget.
The council tax is a good deal for my constituents and they will also deem it a fair deal. They will be pleased that their student children do not now have to pay poll tax and they will be delighted that the least well-off in the community will get up to 100 per cent. discounts and full relief. I commend the council tax to the House. I am delighted that Ministers have listened to what I and others said in previous debates and in private.
If democracy means anything in our society and if our constituents making representations to us means anything, saying, "Yes, we are wrong and we need to amend the proposals" should be applauded and not laughed at by hon. Members such as the hon. Member for Glasgow, Garscadden (Mr. Dewar). I can remember sitting on the Opposition Benches on many occasions and seeing mistakes made by the previous Labour Government. They never retracted those mistakes.
The fact that many of us who supported, and still support, the principle of the community charge, and who voted for it, believing that it was right, but nevertheless saw mistakes in it, made representations to the Government and speeches in the House, and now have the perfect compromise in the council tax, should be commended. That is what good parliamentary democracy is all about. The average voter, the average member of the public out there, would like to see politicians change their minds more often and amend policies taking public opinion and practical experience into account. If they did so, politics and politicians in this country would have a much better name than they do now.

Mr. Bill Michie: The hon. Member for Berkshire, East (Mr. MacKay) said that the Government at least had the courage to admit when they had made a mistake. I have no doubt that they are making another mistake now. The argument seems to be that there was nothing wrong with the principle or the administration of poll tax, it simply cost people too much. What sort of argument is that? That is precisely what the problem was, not just to ordinary ratepayers but to the nation as a whole.
If the Government claim to be honestly admitting that they have made mistakes, why do they not have the honesty to say that the poll tax was a complete and utter disaster? They were told both in Committee and on the Floor of the House how bad the poll tax would be, and what effect it would have. Unfortunately those predictions came true. We cannot be glad that the poll tax died in that way, because it did so only by causing suffering to many of our constituents.
The poll tax was a disaster.

Mr. Illsley: It still is.

Mr. Michie: Indeed, the poll tax is a disaster, and will continue to be. The council tax is "son of disaster". Elements in it are the same as those in the poll tax legislation; it will cause the same problems to the ratepayers; it will meet the same fate. Again, it will be rushed through. We shall not be able to examine every comma, phrase and sentence. That was not allowed in the poll tax debate, and it will not be allowed in the council tax debate.
I understand why the Government want to rush the council tax through. Nevertheless, mistakes will be made again, because we shall not have enough time to scrutinise all the details. I am pleased that the Opposition Front-Bench spokesmen do not wish to delay the legislation for the sake of delay. They do not want to be blamed for keeping the poll tax in its present form. But the Opposition cannot play footsie with the Government when the Government say, "Come and help us with our Bill and share the blame as well as the glory." Unfortunately, there will be no glory, and so far as I am concerned the Government can take the blame.
I am angry about what has happened to local authorities over the past few year, because local authorities are one of my first loves—the work they do and the services that they provide, or at least, used to provide. With the council tax, bills will go through the roof, yet it will not help local government in its function of helping the people who elected it.
Local government has suffered for at least 10 years. Even the rate support grant was fiddled, messed about and changed so much that local authorities found it more and more difficult to cope with their yearly rate assessments and bills. Our amendment at least stresses that we would get rid of poll tax immediately and replace it with a fair rating system.
The only way to cure the immediate problems of local government is to scrap poll tax entirely. That would help to stave off further suffering for local taxpayers, who have already suffered for many years, not only in financial terms but from the stress caused by trying to find out whether those such as young people, single people or unemployed people were eligible for help. The poll tax caused division within households as well as within cities.
The Secretary of State said that he believed in democracy and that the Opposition did not. I dispute that. For me, democracy does not consist in letting the Government run amok with the nation's expenditure without question, nor in saying that the Government alone can make decisions and know what they are talking about. Democracy involves the whole structure of society, including local government. Without local government we should not have a democracy for long; there would be a dictatorship from Westminster. I do not want to hear any

more about our people not believing in democracy because we defend local rates and local authorities. We do that because we are democrats and believe that local government is a good democratic institution which helps people and the nation as a whole.
If there were not so much fiddling with the standard spending assessments, and all the extra burdens of responsibility imposed on local authorities without the wherewithal to implement the legislation, local government would be in a better position. Local authorities have no room for manoeuvre to help people in need in their areas. Local economies are in a sorry state because of Government policies, and nowadays local government has neither the power nor the wherewithal to help local people in difficulties, or even local industry—that is a factor in my constituency.
This is the fag end of the Government. As several of my hon. Friends have said, there is not much in the Queen's Speech. The biggest part of it concerns the council tax. I have learnt from other Members who have spoken that we are not allowed to stray from the subject of the day's debate—local taxation—and deal with the main issues in the Queen's Speech. But there is no doubt that the way in which local authorities are funded has an effect on the economy of cities, constituencies and regions.
Over the years, because of the restrictions placed on local authorities, democratically elected councillors have become less and less able to help people in distress or need. It is said that the Government have been trying for years to slim the nation down—to get it fit and ready to fight, to compete with other countries. They call that lean and hungry. That is not what I call it. The Government have emaciated and starved the nation. The investment which should have been made at national and local level is no longer there; our industry is dying around us. Our nation is emaciated because training programmes are few and far between and are of nothing like the quality which should be expected in a modern society. It is emaciated, too, because of the siphoning off of our national assets and the squandering of North sea oil. The profits from those assets, and the benefits of North sea oil, have not flowed, or even trickled, down to local government.
The nation is not lean either; it is starved. It has been starved of caring because of the idea, encouraged and perpetuated by the Government, especially the former Prime Minister, that there is no such thing as society, and that everyone is on his own. That is the sort of society that has been created; it is not the sort of society that we want.
Local authorities are still trying their best to keep communities together and help in any way that they can, but they cannot do that without proper powers and legislation—certainly not without proper financing. Community spirit in our constituencies is now at rock bottom. There is a shortage of cash, an atmosphere of hopelessness. And what about caring communities? Even under the council tax legislation, if it gets through, if local authorities such as mine decided to help the community in any way, they would be liable to capping or other forms of restriction, as in the past.
It is not local authorities' irresponsible actions or overspending that are to blame: the local authorities have been starved of cash. It is no good the Government saying, "That is your allocation: like it or lump it," if, when something goes wrong, and when the fabric of society in an area falls down, they ask, "What was local government doing about it?" If there is a child abuse case, the


Government immediately ask, "What was the social worker doing about it?", but we all know that the social worker in question was probably dealing with a caseload twice as heavy as that with which he or she should have been dealing and was receiving no extra resources to help.
The Children Act 1989 is welcome; of course it is. But where is the wherewithal to implement it? The Government have made what would appear to be a generous offer, but an examination of the small print reveals that the money needed to implement the Act has been taken away from other areas on the assumption that the Act will take care of them. That is not the case. More and more responsibilities are being placed on local government while less and less cash is being provided to it.
Let us consider how much cash has been wasted on the poll tax. What is it now? Almost £6 billion has been wasted in one year. That is £19 billion in total, or £173 million per week. The mind boggles. What could we not have done with that in terms of home helps, social services, children's nurses, the rising fives and so on? You name it. That money is all gone—wasted on some daft scheme arising from the Government's bitter hatred of local government and its representation of its people. What has happened? The money has been wasted, services have been slashed and local authorities are no longer in a position to identify and deal with areas of weakness and vulnerability in society. If they do, they are penalised for overspending; if they do not, they are criticised by the local electorate.
I know from my experience of local government that, before the bad old days of Toryism, local authorities used to be able to take all sorts of initiatives. We did not just automatically help young people who wanted special training and special courses. Labour-controlled authorities went to the trouble of forming employment departments that adhered to the strict philosophy of trying to help not just local community groups but local businesses. Working hand in hand with the banks, they sought to help private businesses and small businesses—for example, by trying to help companies with cash flow problems. They bought land to enable people to set up businesses and so create jobs and wealth.
That was all down to the local authorities. If we spent that sort of time and money now, the Government would condemn us as overspenders, because such activities do not fall within the criteria that they have set. Local government has been wrongly accused—indeed, I feel, abused—by central Government, when most of the responsibility lies precisely with that central Government.
While on the subject, I have something to say about a subject connected with local authorities. The demise of the nation's manufacturing base has certainly affected my area of Sheffield, where we have lost 30,000 or 40,000 jobs. Little can be done quickly in terms of the provision of Government money, although we have quangos growing up all over the place trying to tell local government to get over a problem that it did not create in the first place. There is no way in which local authorities can get organised to help to cushion the blow of massive redundancies in such a short time. On the one hand, the Government are destroying the nation's manufacturing base while on the other the local councils in areas that are

drastically affected by that destruction are totally restricted both financially and by legislation. That leaves thousands of our people without hope.

Mr. Wilshire: Is the hon. Gentleman really saying that the only way in which a local council or local councillors can achieve anything is by spending money?

Mr. Michie: Of course, strictly speaking, that is not the case. But if the hon. Gentleman wants local authorities to give advice, he must acknowledge that they will incur costs. Or does he want people just to go to the corner shop and ask for advice? Is not it more sensible for them to go to the town hall? If one wants expert advice, one sees an expert, and that expert will be employed by the local authority. If one wants good planning, one employs a good architect, and one pays that architect.
Do the Government want children to have proper accommodation? Do they want people to be protected from abuse of all kinds? If so, they cannot send Joe Bloggs, or anyone who happens to be handy that day, to see people; they must send the relevent expert—social workers or architects. Perhaps the hon. Gentleman is suggesting that all those services can be provided free of charge, in which case that perhaps explains why local government is no longer provided by central Government with the resources that used to be at its disposal.
Local authority initiatives are no longer possible and there is little hope unless we scrap the poll tax completely and bring back some form of fair rates system. That is what the Labour party proposes, and that is what it will do on its return to government next year. In that way, we shall be able to start rebuilding the nation's prosperity. That cannot be done starting from the crackpot ideas of a Tory Government. It must be achieved starting from good initiatives from a Labour Government and, certainly, from local democracy.

Mr. David Wilshire: There is nothing quite like a local government debate to clear the Benches on both sides of the House. You, Madam Deputy Speaker, may feel that you are looking at the same old faces, but I sincerely hope that you are not hearing the same old speeches even if some of what all of us say on these occasions is quite familiar.
When I contacted Mr. Speaker earlier to ask him whether I might speak, I explained to him that, although I fully understood that the topic for today was the council tax and the Opposition amendment connected to it, I wanted to speak particularly about the other local government Bill which is to come before the House, which is much more relevant than you, Madam Deputy Speaker, and other hon. Members may suppose.[Laughter.]You see, Madam Deputy Speaker, they laugh before they hear anything, which shows that they do not want to listen. If Opposition Members read history books—no matter the country in question and no matter the political philosophy of its Government—they will discover that, in the long term, structure is much more important to the health of local government than finance.
My second reason for wishing to speak about the Local Government Bill is that I do not believe that the House can expect to get the finance of local government right without


knowing exactly what it is that we are seeking to finance. I hope that that second point will keep me in order during the rest of my speech, Madam Deputy Speaker.
The snag about the Local Government Bill is that it covers three topics—the extension of powers to the Audit Commission, the extension of competitive tendering, and restructuring. All three matters could be the subject of long speeches but, because of the constraints of time, I shall confine myself to just one of them—restructuring. Let me first explain why I think that the subject of restructuring needs to be thought about at this stage. Someone needs to urge our colleagues, both in this House and in the other place, to avoid the mistakes that have been made in the debates that have taken place so far outside the House and in the lead-up to the legislation that we are now considering.
For my sins, I have listened carefully to a huge number of people in the course of this year. I have studied submissions from 282 of the 335 affected councils, and they do not make happy reading. The process has been profoundly depressing. Throughout my listening and my reading I have found errors resulting from a failure to understand what we are all about. All the time, one finds the same muddle and confusion arising from the failure to think through what it is we are trying to restructure and refinance.
Let me give the House one or two examples. The first error is that the size of a local government area's population matters; it does not. It does not seem to matter in the Scilly Isles, where a couple of thousand people get all their services, nor does it matter in cities with more than 1 million people. Both communities seem to get on quite well. Therefore, population does not matter.
Another error is that the resource base matters. No, it does not if the House gets the Local Government Finance Bill right because that Bill and the contribution from the centre will deal with that. Another error that crops up time and again is that council and service boundaries must be coterminous. That belief led to the foul-up and disaster when we last restructured local government. On that occasion, we drew up the boundaries for service delivery convenience.
An example of the muddle and confusion is that far too many people claim that meeting needs equals providing services. The hon. Member for Sheffield, Heeley (Mr. Michie) exhibited that confusion. Meeting needs means ensuring that services are provided, and that is very different from providing them oneself.
More confusion and muddle is revealed by the statement, "I'm in favour of unitary authorities because I believe in all-purpose authorities." No one, not even someone on the far out-of-sight, left-wing of the Labour party, would suggest that local government should have all-purpose authorities to run every supermarket, and do-it-yourself shop and every solicitor's and doctor's practice. We must be grateful about that confusion.
Another mistake is to believe that accountability means local democracy. It does not. The deliverer of every service, from a corner shop to a hospital, is accountable to every client or customer. Accountability does not necessarily need the intervention of a councillor or any other politician.
How should we avoid those traps? We should home in on and think seriously about one small part of the Local Government Bill. Clause 13(5) provides that the review that is to take place must have

regard to the need—
(a) to reflect the identities and interests of local communities; and (b) to secure effective and convenient local government.
That provision raises four big issues which should be at the heart of the debate that will take place in this House during the winter: what are the identities of local communities? What are their interests? What is local government? How are we to make local government, when we have defined it, effective and convenient?
The first issue—to identify local communities—sounds simple, but mistakes have been made about it on so many occasions that I have almost lost count of them. Only that issue should be allowed to determine local government boundaries. There is only one way to identify local communities, and that is to ask and trust local people and therefore resist temptations to impose solutions from the centre.
However, we must be clear about what we mean by local communities if we are to get things right. That requires us to have regard to the fact that human society, wherever we find it, is highly territorial. In the real world, human society has many levels of community. The implication is that we all belong to several communities so that there is no such thing as one natural community which, if we could find it, would make everything well. We must be clear about what the local government community should be doing. It should respond to service needs and define the area in which people move around for their services. That is the fundamental issue, but we are still talking about local communities.

Mr. Bill Michie: Who is going to pay?

Mr. Wilshire: Perhaps the hon. Gentleman will stop and think about it. Obviously local people and central Government would pay—or does he want all local government to be paid for locally, irrespective of how we define it? That would be grossly unfair. Alternatively, if it was all paid for by central Government, the element of local democracy would disappear. I am not suggesting anything vastly expensive. I am simply suggesting that we should listen to local people. If they say that they want something small, let them have something small. If they want something big, let them have it.
Irrespective of issues such as finance, rate capping and charge capping, boundaries must not be drawn for service convenience or for financial consideration. They must be drawn according to what local people want for themselves. There is no ideal or minimum size and there is no standard solution. The Cornish may want to remain Cornish and simply retain Cornwall. However, I am certain that Bristolians do not have the slightest desire to remain in Avon or to be put in Somerset or Gloucestershire.

Mr. Illsley: The hon. Gentleman appears to be saying that, no matter what size the local community wishes to be, it can be classed as a local authority perhaps alongside a large area in which, speaking purely in geographical terms, the people want to be a large authority. Surely there would be losses through economies of scale if that was the case. Surely there must be a minimum size.

Mr. Wilshire: The hon. Gentleman reveals one of the muddles—that meeting needs and delivering services are the same thing. There are different ways of achieving economies of scale in a small community as opposed to a big one. If the natural community boundaries with regard


to the Local Government Finance Bill are defined for service convenience, we will fall into the trap that people fell into years ago.
We must also consider the interests of local communities. It is important to be clear what those interests are not. They are not simply confined to local government services. A local community is as interested in its hospital as it is in its dustbins——

Mr. Bellotti: It is not allowed to be.

Mr. Wilshire: Yes, it is. That is the point. That confuses being interested and allowing councillors to be involved.
The interests of local authorities do not involve who employs the people who empty the dustbins or who employs swimming pool attendants. It is all about the quality of those services. The interests of the local community are not about who owns the electricity company, but about the quality of service provided. They are not about how hospitals—which are topical at the moment—are managed, but about the quality of the service provided.
If that is so, what does it mean for the interests of local government? It means that we should be talking not about economies of scale or about size, but about whether the values of local communities are upheld; whether the needs of local communities are met—whoever meets them; whether local priorities are being set and followed and whether they are being set by local people instead of being foisted on them. Local people are interested in service quality being of the highest possible level and service costs being at the lowest possible level. That is the true role of local government and of councillors.
The next consideration in the Local Government Bill is effective and convenient local government. However, we must first be clear what we mean by local government. There are two concepts floating around on both sides of the House—this is not a party political point—about what local government means. The first is that local government is owned by central Government, and the other is that local government is owned by local people.
This Government, the previous Labour Government and virtually every other Government that I have ever come across have tended to focus on ownership of local government from the centre. But the truth is that central Government simply devise the local framework, and then central Government allocate services, but central Government and this House do not own local government. Local government is owned by local people. The implications of that——

Mr. Donald Dewar: The hon. Gentleman is against capping.

Mr. Wilshire: I shall put the hon. Gentleman out of his misery. I am not against capping, and he will see why in a moment.
The implications of what I have said are profound. The hon. Gentleman is quite right to intimate that I have said something significant, but it is not what he thinks I have said. The implications are profound for the Local Government Finance Bill, but not for the reasons that the hon. Gentleman gives, and they are even more profound for the future of local government itself. If we cannot get

back to the concept of local government being owned by local people, the future of local government looks pretty bleak.

Mr. Graham: It is bleak just now.

Mr. Wilshire: It is bleak because too many people, particularly in the hon. Gentleman's party, are locked into spending money on interfering in things that local people do not want them to interfere in, or they are wasting money. All those things make the future of local government pretty bleak at the moment.
Having decided what local government means, we can then consider how to make it effective and convenient. If we want to make it effective, we need to look at what the dictionary has to say about the word "effective" and then what it has to say about "convenient". Effectiveness is one of the three Es of the Audit Commission—effectiveness, efficiency and economy. It is interesting that only one of them is mentioned in the Bill. That is absolutely right, because effectiveness is about meeting needs and it is highly political, which is why the Audit Commission and others have always found it difficult to have anything helpful to say about effectiveness.
Efficiency and economy are left out of the Bill for one simple reason—that is, efficiency and economy are about delivering services, not meeting needs. Thus, if we think about effectiveness, we focus our debate upon the needs of local people, and that is absolutely fundamental. Effective local government is about working with local people in areas with which local people identify, irrespective of how the services are provided, and in ways that best meet the needs of local people and not the convenience of service deliverers.
If we want to achieve convenient local government, the dictionary becomes very unhelpful indeed. I wish I could be more positive about that, but I cannot. My dictionary says that convenience means freedom from difficulty or trouble. I wish that it were possible to have freedom from difficulty or trouble in local government, but it is not. Tension is inevitable, for three good reasons.
First, local government is subservient to central Government in any nation state, and that is bound to bring conflict and tension—it is inevitable. Secondly, in the United Kingdom, there is no formal regional organisation. It is perfectly possible to do without it, but it does not half make for additional tension if the absence of a regional organisation is not handled carefully. The third reason why tension is inevitable is that change in society is rapid and great and totally outside the control of politicians. I suspect that, in respect of trying to achieve convenient local government, the best the House could hope for is to achieve the least inconvenient, because that is the reality of the situation.
Thus far I have quite deliberately said little about services, because that is what the Bill wants us to do. It is about local people, local communities and their needs, not about services or the convenience of their managers, and it is not directly about the economy and efficiency of service provision. However, outside the House, the debate about the Bill has been dominated by such issues. It has been dominated by considerations of who controls which service. It has been dominated by debates about making sure that there are areas big enough for efficient provision. But both are issues totally separate from the issues that we should consider when we restructure local government.
The correct way forward for services is that each and every service must be designed separately and independently of natural community boundaries. Surely nobody suggests that the service boundaries of the gas supplier or the Post Office, for example, should automatically coincide with local government boundaries. Of course we do not say that. Why, therefore, should we automatically assume that education, social services or refuse collection boundaries should automatically coincide with a natural community boundary?
The other point about making progress in that direction is that each and every service needs to be allocated separately to the person——

Mr. Bellotti: Is the hon. Gentleman suggesting that every local authority service could have a different boundary? If so, it is rather incredible, and I should like the hon. Gentleman further to explain.

Mr. Wilshire: The hon. Gentleman makes my point for me. He said "every local authority service". We should not be considering simply local government services. If local government is to be truly effective on behalf of local people, it will have just as much interest in the Post Office, British Rail, the local supermarket and so on. If, however, the hon. Gentleman and his party wish to focus upon those services that are provided by local government, we will fail all over again, because the debate will focus on who controls what. We will be talking about efficiency of service delivery, we will draw up boundaries and have councils which reflect service delivery, and people will simply not identify with them. However, if we go down my track, we will welcome the Bill and make the Bill serve the purpose of local government.
I hope that what I have had to say has alerted the House to the errors that have been made elsewhere and to the muddle and confusion. I very much hope that the forthcoming consideration will seek to define natural communities, not service territories. I hope that it will focus on the needs of people rather than on the services that are delivered to meet them. It must detach the designing of services from drawing council boundaries.
If we do that, we will secure once and for all the future of local government, improve service delivery at the same time, and enhance local democracy. If we do not do that, we will live to rue the day. The wish for a good future for local government unites all parties and all people inside and outside the Chamber. If that is so, the needs of people and respecting them must come first, and then we will get it right.

Mr. Gerry Steinberg: I quote:
The community charge is here to stay. I don't think that by the time the next election comes the idea that we should overhaul once again the whole system of local government finance will be regarded by the electorate as a terribly cheering idea. Maybe one day we'll have people breaking the law and painting on the sides of buildings 'Up with the community charge"'.
Those are the very profound words of the right hon. Member for Bath (Mr. Patten) in an article inThe Spectator only a little more than a year ago. As usual, he got it wrong. As usual, the arrogance of the Conservative party could be seen in the words of its chairman. The Tories got it wrong with the poll tax, but they were not prepared to admit it. The Government misled the electorate, but they were not prepared to admit it. They

blindly carried on saying how popular the poll tax was, when, from day one, everyone knew that it was a disaster and that eventually it would have to go.
Today we are discussing a new tax to replace the poll tax—the poll tax that has hardly been with us any length of time and yet has been a disaster. Statements by the chairman of the Conservative party and by many other leading Tories have shown them to be totally inept in not being able to glean just what a disaster it was. The Government have disgracefully squandered billions of pounds on the poll tax. Billions of pounds of taxpayers' money have been wasted on a tax which everyone except the Conservatives knew would fail.
Even at the end of 1990, when everyone knew that the poll tax was becoming a liability and a disgrace, the hon. Member for Enfield, Southgate (Mr. Portillo) said at the Conservative party conference:
The community charge is a courageous, fair and sensible solution. Far from being a vote loser, with your help it will be a vote winner and launch us on our fourth term. Let's go out from this hall together and proclaim its advantages. The community charge makes local government accountable; the community charge revives local democracy; the community charge puts power into the hands of local people. That, ladies and gentlemen, is an achievement to be proud of.
If it is such an achievement, why are we discussing the new council tax today, a tax that is intended to get rid of the dreaded poll tax? The reason is that the Conservative party is an arrogant party that will not listen or take' advice.
When the poll tax was originally introduced in the House, my right hon. and hon. Friends pleaded with the Government not to introduce it, saying that it was a bad and unfair tax. But the Government did not listen and we can all be sure that they will not listen today either. Just like the poll tax, the council tax is deeply flawed. It is not a fair or a practical tax and it certainly will not stand the test of time.
The administrative complexity of the system is likely to be worse than that required by the poll tax. The whole thing will be a shambles and as unpopular as the poll tax. The new council tax will be based on an inadequately banded valuation of property, with a fixed upper limit that is designed to protect the very rich at the expense of everyone else. Is not that exactly the same as the poll tax? As we said when the poll tax was introduced, the council tax is just another tax that has been designed to protect the very rich. There is no doubt that it is a flawed and a doomed tax.
The appeal system is vague. The banding and discount schemes will mean that bills will not be related to people's ability to pay. The discount scheme will cause tremendous problems and will be a bone of contention causing disruption, just like the poll tax. Every property in Britain will be banded. Why is the difference in property values between band A and band H in the ratio of 1:8 while the difference in bills for households between those in the bottom band and those in the top band will be only in the ratio of 1:3? The council tax proposals are and will remain contentious. The number of bands and the fact that they are national and do not allow for regional variations will cause great resentment throughout the country.
The use of estate agents to carry out the valuations will cause tremendous problems. Different estate agents will have different views. The assessment process will be seen to be totally unfair. Valuations will be carried out not on individual properties, but on packages of about 20,000


properties. Individual properties will not be given an actual value. The operation of such a simple and crude system is bound to cause tremendous problems and to trigger masses of appeals from people who do not accept that their property has been valued correctly.

Mr. Brandon-Bravo: Before leaving his point about valuations and his criticism of the fact that there is only a national scheme, will the hon. Gentleman agree that the old rating system often led to properties in low-rated areas having a high rate in the pound, while in high-rated areas, some properties had low rates in the pound? I do not see what the difference is. Perhaps the hon. Gentleman can explain it, because it is his party that wants to return to the old rating system.

Mr. Steinberg: The difference is that someone whose property is too highly valued and placed in the wrong band will pay more than he or she should. If the hon. Gentleman cannot recognise that, it is easy to see why his party is in its present difficulties.
The biggest complaint that I hear about the poll tax is that people whose house may be exactly the same as that of their neighbours and who may earn exactly the same wage are paying a different amount. That causes tremendous resentment—and rightly so. Another complaint is that a single pensioner may have to pay more than the working couple who live next door. Again, that causes tremendous resentment. We must get away from such a state of affairs. However, under the council tax, the bills received by identical households with the same income may differ simply because of the identity and status of the person who is nominated as the "liable" person, thus causing exactly the same resentment.
It is now almost certain that, despite what the legislation may say, local authorities will have to compile a register or list if they are to administer the tax efficiently. Although we were told by the Secretary of State that there would be no need for a register, a register or list of adults will be required to administer the system of the 25 per cent. single person and status discounts.
The importance attached to the head count element of the new tax is obviously the result of pressure from the right wing of the Tory party and is most clearly revealed in the proposals for the complex system of discounts. Despite what the Government have said, the system of discounts and household liability will make administering the tax almost impossible without a register listing every adult, similar to that which was needed for the poll tax. For most households, councils will need to know the number of people living in a house and the relationship between them.
If ever there was an infringement of people's liberty, this must be the ultimate example of it and, frankly, it is even worse than with the poll tax. Help with bills will be lost if additional individuals move into households. In many cases, the income of every adult in the household will need to be known by the local authority before the bill can be calculated. Is not that crazy? Is not that exactly the same system that the poll tax produced and was it not that system that caused so much hatred towards the poll tax?
The Government got the amount of the poll tax bills wrong. When they introduced the poll tax, they said that the average bill would be about £178. They soon revised

that and said that the bills would average £278, but when the bills were sent out for the first time, the average amount turned out to be £357. The signs are that, yet again, the Government have got their sums wrong. They have already made the mistake of overestimating property prices when establishing the bands.
Recent figures from the building societies show that house prices will be well below those used by the Government for their council tax calculations. Although the council tax retains a head tax element, it has been devised as a property tax. Each household will receive a tax bill that is based on the value of the property, but that value will not necessarily be the property's actual value. Is that not an incredible U-turn from the Government? Is that not an amazing volte-face?
I am sure that hon. Members will recall that only recently the hon. Member for Enfield, Southgate said:
Any system based on property will repeat the injustice of the domestic rates … taxes on people's homes are unfair. Property values bear little relation to people's ability to pay.
How can anybody ever again take seriously anything that the hon. Gentleman says—that is, if he was ever taken seriously in the first place?
The Government aim to have the new tax up and running by April 1993. That means that the Local Government Finance Bill will have to complete its parliamentary passage quickly. Therefore, as was the case with the poll tax, much of the detail does not appear in the Bill but will be introduced later through regulations. Again, as with the poll tax, it will be a total catastrophe and a total nonsense.
When the poll tax was introduced, we repeatedly warned the Government not to go ahead, but they are yet again introducing a tax without any thought, research or real idea of what will happen. Again, Opposition Members are warning them that they are moving towards disaster.
Last year, the Prime Minister said:
One of the difficulties we got into with the community charge was being bounced into decisions before they were fully thought through and before we knew precisely how they would affect people".
That attitude is typical of everything that the Government have done. But the Prime Minister is now set to do the same thing all over again with the council tax by trying to rush it through even more quickly than the poll tax. The new tax will prove as disastrous for the British people as was the poll tax.
Will the council tax be fair? As we all know, unfairness was the reason why the poll tax failed, but many people to whom I have talked already believe that the council tax will be unfair because, once again, it will not be related to people's ability to pay, which should be a characteristic of any good tax.
Early indications are that the Government's predictions are all wrong and that, as happened with the poll tax, when the first bills go out they will be twice as much as the Government have estimated. I welcome the Government's decision to get rid of the poll tax and to reintroduce a property tax, because that is basically what the Labour party would do. But this Conservative council tax is the wrong option. It is ill thought out and badly prepared, just like the poll tax, and the Tories are making it up as they go along.
First they were going to have 14 valuation bands, then seven, then nine, then seven again, and now we have eight. Despite the Government's promises and the chaos of the poll tax, the poll tax is still with us and poll tax bills will


be going out in March and April 1992. If only the Government had been prepared to accept Labour's help to solve the problem, we could have got rid of the poll tax.
The delay in abolishing the poll tax is due entirely to the Government's unwillingness to co-operate with the Labour party. If they had co-operated, we could have got rid of the poll tax and returned to the rating system straight away. Because the poll tax is still with us, it is becoming increasingly difficult to collect. The debt throughout the country is more than £1·5 billion and continually rising.

Mr. Wilshire: Surely the hon. Gentleman knows why the poll tax is becoming increasingly difficult to collect. It is because Labour Members set such a dreadful example by breaking the law and refusing to pay.

Mr. Steinberg: Do not talk so much drivel. That is absolute drivel and you know that—[Interruption.]

Madam Deputy Speaker: Order. I hope that the hon. Member will correct what he said.

Mr. Steinberg: I certainly will, Madam Deputy Speaker. I have never known you to speak drivel in your life.

Madam Deputy Speaker: That is because I hardly ever speak.

Mr. Steinberg: The only drivel that ever comes out of the House comes from Conservatives, and we have just heard it again from the hon. Member for Spelthorne (Mr. Wilshire), who spoke for about half an hour.
If only the Government had listened to us—but they continued to refuse to co-operate with the Labour party. They continue to keep the discredited 20 per cent. contribution rule, which is inflicting dreadful and unnecessary hardship on the poor and is undermining the ability of councils to collect the tax. Would the Government do anything about it? Would they listen? No, they never do, because they are so arrogant. As a result, I am pleased to say, they will lose the next general election.
The British people are sick to death of the unfair poll tax. It does not matter where one goes or who one talks to—all one hears is how unfair it is. It will be with us until 1993 at the earliest if the Conservatives win the election. Fortunately, they will not. The British people want a tax that is based on the principle of fairness. They want it based on the ability to pay and the council tax, like the poll tax, will fail those tests.
In 1990, the chairman of the Conservative party said:
You must know that any fundamental change from the existing system will in fact create many millions of losers. The only way of avoiding this is by pumping in billions of pounds of taxpayers' money from the Exchequer.
That is exactly what the Government did last year. They pumped in £4 billion of taxpayers' money to cushion the poll tax. The poll tax had to be subsidised to such an extent that it is costing the Exchequer billions of pounds in an attempt to take away the pressure that it has caused on the Tory party.
Recently, the former leader of the Tory party apologised for the dreadful mistake that she had made in the broadcasting franchise fiasco. More appropriately, she and the Tories should be apologising to the British people for the catastrophe of lumbering them with the dreadful poll tax and the misery that it has caused so many people.
Many leading Tories made speeches viciously condemning a property tax. The right hon. Members for Mole Valley (Mr. Baker), for City of London and Westminster, South (Mr. Brooke), for Suffolk, Coastal (Mr. Gummer), for Wirral, West (Mr. Hunt), for Witney (Mr. Hurd), for Kingston upon Thames (Mr. Lamont) and for Bath (Mr. Patten), the hon. Member for Enfield, Southgate (Mr. Portillo) and the right hon. and learned Members for Edinburgh, Pentlands (Mr. Rifkind) and for Folkestone and Hythe (Mr. Howard) all viciously attacked the suggestion of a property tax. Yet now they promote this council tax, which will be just as bad and just as painful as the poll tax.
Were those right hon. and hon. Members converted by argument or perhaps by sorrow for what they have done, or by pity for the poll tax payer? No, they were converted simply because they realised that they would lose their seats and lose office at the next general election if they did not do something.
Adopting the council tax is jumping out of the frying pan into the fire. The council tax will be no better than the poll tax. It will be just as unfair as the poll tax and will lose the Tories the general election, just as the poll tax would have done.

Mr. Martin M. Brandon-Bravo: I was delighted that the Gracious Speech contained provisions for both the major Bills dealing with local authority functions, management and finance. I hope that I will catch your eye, Madam Deputy Speaker, on Second Reading of at least one of those Bills. I am delighted that we can refer broadly in this debate to those Bills.
All too frequently, Conservative Members are wrongly accused of being anti-local authorities. Those accusations are always made by the same people who have all but destroyed public support for the local authority concept because of their blindness to the requirements of good financial management within local authorities. When it goes wrong, they always seek to blame central Government. It is never their fault at local level.
It is very much to the credit of my right hon. Friends the Prime Minister and the Secretary of State for the Environment that they have returned to basics and have not looked at finance in isolation. They are looking at structure and functions at the same time.
We will certainly not again make the mistake that was made in the 1970s and 1980s. It is true that the Conservative party got it wrong 20 years ago when the belief in the two-tier system for local authorities was fashionable and won the day. True, it was working in some areas at that time. No doubt, following the local government commission which will be set up under the new Bill, that system will continue, where appropriate—but only where clearly appropriate. I am pleased that we recognised our earlier error. In the 1983 to 1987 Parliament, we removed the metropolitan upper tier. I am delighted that we will continue that process under my right hon. Friends the Prime Minister and the Secretary of State in the new Parliament which will be formed some time late next spring or in the summer.
It goes without saying that a great urban conurbation such as Nottingham cannot and must not have its affairs meddled in by councillors from Mansfield, Worksop and Retford who, although loyal Nottinghamshire people,


have no community of interest in our great city and who, not surprisingly, want their towns to have as much of the county cake as they can get.
Legislation that will take further the right of the public to know just how their council matches up with others must be right. It must also be right to have proper mechanisms in place to ensure that they get value for money. Only the committed socialists on the Opposition Benches can oppose such a move, in the belief that only local authority organisations should provide services. As my hon. Friend the Member for Spelthorne (Mr. Wilshire) pointed out, it does not follow that an identified public need must be met by a public sector bureaucracy. If services of the right standard giving better value for public money can be provided, the resources saved will be available to meet other public needs. That surely must make sense.
The main Bill scraps the poll tax and provides local finance through the establishment of a new council tax. Like many of my colleagues, I plead guilty to the fact that I willingly supported the principle behind the original poll tax Bill. However, I did argue that certain key protections against abuse were not in that Bill. Too many local authorities used the changeover to milk people of money that they did not have through bills that they could not have anticipated and therefore provided for. That naivety will not be repeated in the new Bill.
Given that, at least in the first year of the new council tax, there will still be two-tier authorities in the shires, I hope that the Bill will be as tight as a drum to ensure that the tiered authorities that are not up for election do not use that freedom from the ballot box—as happened in Nottinghamshire with the poll tax—to wreck the council tax in the way that they wrecked the poll tax in its first year. Even if it can be shown that many authorities will have elections at that time, we must not be naive again. We must screw the lid on spending as tightly as possible, so that a true and proper comparison can be made between the old rates system, uprated to match current spending, the poll tax charge, and the new council tax.
Unless anyone should mistake my purpose, I say clearly that, provided that local authorities, at the point of change in April 1993, have the power to spend that which they are spending this year, plus inflation, not one meal on wheels, not one old people's home, not one teacher—in fact not one public provision—need be cut. If that were to happen, let it be clear that that would be typical of the cynical manipulation by Labour councils of the most vulnerable in our society, and nothing to do with the new council tax.
If Labour Members do not think that their party is the most cynical shower alive, I can give them a classic example from my county. There has been a great deal of national publicity about the plans of the Labour-controlled Nottinghamshire authority to close 12 old peoples' homes. One, Rivergreen, in my constituency, is a happy, well-run, well-managed, well-staffed home. It is an integral part of the community of Clifton, which is the second largest estate in England. Our county council always has enough money for the obscure and the daft, but when it comes to providing for its old people's homes, it does not have money. Its answer to the problem is either that it is entitled to more money from central Government,

regardless of how much its rate support grant for the social services sector has risen, or that it needs the unfettered right to raise further taxes locally.
That brings me back to the earlier part of our debate, from which we now know that the Labour and the Liberal Democrat parties want absolutely no constraints on the ability of a local authority to raise whatever level of tax it decides. I assure the House that money is not the problem for the old people's homes in my constituency. It is the will of the controlling Labour group and its inability to manage financial affairs. Any county council that cannot find elbow room within a £600 million-plus budget to look after its old people's homes should stand aside and let some of my colleagues take over.

Mr. Bellotti: The example cited by the hon. Gentleman from his constituency is well known to hon. Members because it is repeated in other constituencies. Is the hon. Gentleman aware that in East Sussex, where the Conservatives control the county council, there is exactly the same problem because the Conservatives want to close seven old people's homes? I am sure that he would agree that the real problem is that local authorities across the country cannot spend the necessary money on our elderly people because of the capping regime imposed by central Government.

Hon. Members: Absolute rubbish.

Mr. Brandon-Bravo: As my hon. Friends have said, that is absolute rubbish. What I have said about Nottingham I would also have said about East Sussex had I had the same information. I do not have the slightest doubt that in Nottingham the money is available to do whatever is necessary to keep open those old people's homes, and so remove once and for all the worry of hundreds of residents in those homes.

Mr. Illsley: Where would Nottinghamshire county council find the elbow room to which the hon. Gentleman referred? Is he saying that it has balances that are not accounted for by other services? If so, the Government should be taking another look at the amount of grant that that council receives. If that is not the case, from which services would the hon. Gentleman want to take money to spend on the old people's homes?

Mr. Brandon-Bravo: Labour Members always imagine that some service or other would have to be cut to do what is right. I can tell him that Nottinghamshire county council's balances are more than adequate to deal with those old people's homes, without touching any other departmental budget. The hon. Gentleman should ask anybody in and around Nottingham whether they approve of the famous leaf stem statue, which costs £38,000, the coloured blobs under one of the car parks, which cost £28,000, or the provision of a day centre for the winos who are driving everybody mad, which cost £160,000. The list is endless. The council will always find money for whatever suits it, but when it comes to the elderly—the most vulnerable in our society—they always play ducks and drakes. They want maximum party-political benefit.

Mr. Wilshire: My hon. Friend said that the county council's not looking after the elderly properly was a reflection of the will of Labour councillors. Does he agree


that it is all about the priorities of Labour councillors? It appears that in Nottingham they put sculpture above the interests of the elderly.

Mr. Brandon-Bravo: My hon. Friend has it in one—[Interruption.] lf a simple answer will do, there is no need to take a paragraph. My hon. Friend had it in a nutshell.
I have not yet had time to study the minutiae of the Bill which, as we now know, runs to 163 pages, but I want to touch briefly on certain parts of it. The great problem with the poll tax was the collection procedures. I am not slow to sing the praises of the city of Nottingham, and there are good grounds for doing so. However, in devising its method of collecting poll tax, in the words of that famous song, "If there was a wrong way to do it, the right way to screw it," nobody did it like Nottingham. My constituents have had to pay an additional £44·75 per adult because of that incompetence, and that is a disgrace. It is made all the more aggravating when people living inside the city know how little it costs the authorities outside the city o do precisely the same job. I hope that the legislation that will come before us next week will ensure that that will not happen again.
Equally, who is liable and what is meant by "occupier" must be beyond doubt in the new Bill. Where, as in many inner-city areas, there is a high turnover of occupancy, I hope that there will be powers to levy the owner in order to ensure that the financial base of local authorities is not undermined.
In order that our desired aim to assist one-person households is not blurred by lack of definition, the phrase in the present legislation "sole or main residence" must be defined beyond doubt.
I also plead self—interest if that is the right term—in supporting the view taken on students. With some 22,000 students moving around within our city, even if one felt that a nominal sum should be paid—here I am looking after the interests of the hon. Member for City of Durham (Mr. Steinberg) whose lovely daughter is now a constituent of mine; I trust that she will be sensible and know where to put her cross—it is clearly administratively impossible to handle and, given the changes in student support, that small relief will be welcome.
I, hope, too, that my right hon. Friend the Secretary of State will address the technical problems of billing, particularly carry-over yearly billing, to avoid current confusion with many charge payers, because I regret that separate billing has not increased accountability. If it is already in the Bill, I apologise, but I hope that we will finally resolve the injustice of the tax on empty properties.
Finally, since all too many non-payers were simply "won't payers", sponging on the rest, I hope that we will provide all the powers necessary to ensure that never again are my constituents expected to pay for the law breakers.

Mr. Thomas Graham: Conservative Members' speeches today show that they have not learnt the lesson of their hatred of local government. They continue to work against the democratic interests of the nation whose people do support the concept of local government.
The Secretary of State made one of the worst speeches that I have ever heard from a Minister in the House. I was appalled to hear his jovial, jocular style. Bob Hope must

have written his script. However, many people are living in abject poverty because of the poll tax. There are many who cannot pay.
Watching the Secretary of State today was like watching Jesse James leading a bunch of desperadoes governing the country like a bunch of robbers. The Secretary of State for Scotland, who is now on the Government Front Bench, reminds me of the Sundance Kid and his brigade.
I am appalled that the Government have not learnt the lesson from Scotland. Scottish Members raised in the House the problems faced by Scotland and clearly indentified the terrible damage that the poll tax was doing to the people of Scotland, but the Government continued to blunder on in their merry way. Only after a 10 per cent. drop in their fortunes in the opinion polls did they decide that, with the general election coming up, and the prospect of their being routed, they should do something. They came up with the council tax.
The Secretary of State's comments today were so shabby and his speech was so shallow that he did not make me laugh. We have heard some speeches tonight about the poll tax, but I want to read the editorial in the Glasgow Evening Times, so aptly published on 5 November, Guy Fawkes night. It is no wonder that ordinary men and women throughout the country wish that Guy Fawkes had been successful when they consider the punishment that this House has levelled at ordinary men and women in a state of poverty. The hon. Member for Chelmsford (Mr. Burns) shakes his head, but he should come to my constituency and I will introduce him to people who cannot pay the poll tax because they simply do not have the money.
This is not an editorial from a Labour weekly; it is a reputable Scottish newspaper, as I am sure the Under-Secretary of State will agree. I want to read all of it to make sure that it appears in Hansard. It is entitled "Myth of the tax rebels" and it says:
Over the last decade the Government has done a better job of blowing local authorities to smithereens than Guy Fawkes.
That is the real reason Strathclyde finds itself in the midst of the gravest financial crisis in its history—not the 'can pay, won't pay' Poll Tax rebels.
The truth is the bulk of the £250M shortfall in Poll Tax, a debt mountain that has steadily grown over three years, is owed not by rebels, but by people who haven't a penny to their name.
The middle class revolt has turned to a whimper. Nearly all the collectable money is now in; only a small number of diehards continue to withhold cash.
That will not stop non-payers being used as convenient scapegoats. In Tory demonology they will always carry the can.
We have seen that tonight.
The article goes on:
The reality is the Poll Tax represents just 14 per cent. of Strathclyde's budget. The remaining 86 per cent. comes in Government grants.
Under the Conservatives those grants have fallen hugely. Over ten years, Scotland's councils have lost £600 million in grant aid—or £170 for every Poll Tax payer in the land.
Costs
Strathclyde, hit proportionately harder, has been like a man living on starvation rations throughout the eighties. Forced to become more efficient and cost-conscious, it had to devise imaginative measures to keep services going.
And when privatisation of services was introduced many staff lost job security, worked for lower pay and saw their pension rights eroded.


But any fat the Region may once have had is long gone. The Poll Tax was the last straw.
The Government's refusal to accept needy folk can't pay has left the Region chasing its own tail—trying, at vast cost, to collect money that by and large simply isn't there.
That is why 750 jobs are being shed and a whopping 32 per cent. rise in the Poll Tax is likely next year.
Poll Tax rebels are only bit-players in this crisis. The responsibility lies four-square with the Government and its chronic underfunding of councils.
Alongside that editorial, there is a small paragraph which says:
Government grants for Scottish local authorities have slumped from 67 per cent. to 55 per cent. over the past ten years.
That is one of the most devastating of editorials.
All Members of Parliament hold surgeries, and many have received complaints about the poll tax from constituents who are viciously angry with the Government. Some decided that they would not pay the poll tax, but the people about whom I worry are those such as the elderly lady suffering from a form of senile dementia who came to me because she was being harassed about the poll tax. The Government wanted 20 per cent. of the amount from that woman. For months, we in Scotland begged the Government to give 100 per cent. rebates to people such as that lady.
I received a call from another constituent who was frightened because she had been slapped with not one warrant sale but two, yet she had paid her poll tax. I remember telling the Secretary of State that the poll tax was cumbersome, burdening and complicated; that it would give a great deal of trouble to local council finance departments; and that it was inevitable that thousands upon thousands of mistakes would be made. That has proved to be the case.
I remember looking at a graph showing the complications of the financing of the community charge. It looked as though someone had spilled a can of spaghetti and had to make some sense of it. The elderly and the unemployed are being hounded by the Government, and there is no end in sight. The tax is continuing into 1993. The Government are still after their pound of flesh. They do not have the sense, decency, or caring to give people a 100 per cent. rebate now, yet they cannot get blood out of a stone.
Ministers are a bunch of desperadoes, and they are carrying on like a bunch of stoneheads. The only way that we will get rid of them is by a general election. The poll tax is an albatross round the Government's neck and the council tax will be another, because the Government will not allow proper debate on it in the House. Instead, they want to steamroller it through with a guillotine, and will not entertain common-sense discussion. Is that what democracy has come to in this country, with the democratically elected Government refusing to listen to the democratically elected Opposition—who will be unable to reveal the flaws in the council tax as we did in the case of the poll tax, and which were soon clear for all to see?
The Secretary of State for Scotland smiles. He knows that the poll tax was a shambles, but he was a diehard and continued to go to the wall with it. That is not true of many Tory Members of Parliament in Scotland, who are desperate to get rid of the poll tax.
I would welcome anything that would improve the legislation. I hope that a general election will be declared soon, that it will be fair, and that it will serve to bring back a decent system. A Labour Government will offer such a system. It will offer a fair rates policy that gives 100 per cent. rates relief to people whom the present Government have abandoned. They have shown by their tasteless and tactless menace tonight that they are still not prepared to take on board the problems of people who cannot pay their poll tax because they do not have sufficient funds.
The Secretary of State could take the necessary steps to give people a 100 per cent. rebate now and even make it retroactive. [Interruption.]Do not the members of the Government Front Bench think that my remarks are important? Does not the Secretary of State realise that thousands and thousands of people who still cannot pay the poll tax are facing court action and warrant sales? Does the Secretary of State think that that is right? Does he believe that one can get blood out of a stone? It has never been done.
It is time that the Government realised that, took steps to protect people who are suffering as a consequence of their lamentable and disastrous poll tax, and ensured that the council tax reflects more sympathy and caring. I hope that a general election will be held quickly, so that we can show the Government the door.

Mr. Kenneth Hind: I welcome this opportunity to congratulate the Government on the Gracious Speech and on their proposal to abolish the community charge and to replace it with the council tax. I take the point made by the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), that many people are unable to pay the community charge. I have met many of them at my advice surgery, and I will weep no tears over the demise of a tax that had no progressive element and which sometimes militated against people on low incomes. So the community charge will go.

Mr. Graham: That is a change of heart.

Mr. Hind: Yes, some of us changed our minds, because we could see the effects of the poll tax.
Many right hon. and hon. Members should remember that we started with a tax of only £175 a head. We did not reckon on greedy Labour authorities utilising the change to conceal vast increases in public expenditure that they forced on to thousands of unsuspecting electors in our communities, to try to persuade them to change their allegiance from the Conservative party to Labour. That is what happened, and we now realise that we must take away from such authorities that most unjust tool with which they managed to acquire electoral support that they did not deserve and have unscrupulously used.
I welcome the change to a single bill for each household. A great difficulty with the community charge, which was a point of grievance among many of my constituents, is that people can move on and avoid paying it, with the inevitable result that the rest of the community is called upon to meet the shortfall.
Fortunately, we have altered the system. Due to the change in the taxation balance, national Government will pay 85 per cent. of local government expenditure, with the remaining 15 per cent. left to be levied through the council tax. In future, that will mean that the old high rates will no


longer be levied on the unsuspecting population, and we will see a continuation of support by central Government of local government.
Fortunately, too, Labour has agreed to continue with that policy should it come to power—so let us hear no more complaints about depriving local government of central Government funds because of cuts in rate support grant, revenue support grant, or whatever it is called today. In future, large amounts of taxpayers' money will go to support local government.
The banding system is a move towards progressive taxation, which I welcome. Logically, people live in a particular type of house because it is one that they can afford to purchase or rent and to maintain, so there is a rough and ready relationship between the value of their home and their income. That will be one of the mainstays and pillars of the council tax.
The council tax will avoid the problems of the past. The Bill's tough capping measures will ensure that Labour councils will be unable to pursue the profligate spending that they managed in the past, and that they will be controlled.
I was disappointed to hear the hon. Member for Dagenham (Mr. Gould) say that Labour would abandon capping. I hope that the public realise the implications of that. If Labour returns to power, we shall have a return to the bad old days: Labour councils will be able to spend, spend, spend. They will be able to milk local taxpayers as they did with the rates, irrespective of the consequences. Their line will he, "Don't worry: we are the money milch cows who will provide the cash for the future."
That is diabolical. I hope that the public understand that, in the event of a Labour Government, they cart look forward to being milked by Labour councils that will levy high rates of their new tax—as well as being milked by a national Government through increased rates of income tax.
The hon. Member for Eastbourne (Mr. Bellotti), who is not in the Chamber now, complained about the amount that people had to pay. The Bill, however, will not only abolish the current registration arrangements, but introduce an extensive rebate scheme, allowing rebates of up to 100 per cent. to protect those on low incomes. Many of us will welcome the end of the 20 per cent. charge, principally because it hit the worst-off but also because it probably cost more to collect than was gained in revenue.
Students will benefit: those living in digs or halls of residence will no longer have to pay anything. Student nurses, those on youth training schemes and others will also be helped.
The electorate must realise that, if Labour is successful at the next general election—which is highly unlikely—we shall immediately return to the old rating system. The Leader of the Opposition has complained that that was an unfair tax, but has now managed to stand on his head and support the current proposal. Labour Members quote figures in relation to their proposed fair rating scheme, but they give only averages; there are no details, sums or projections. Their whole scheme is flawed, because it is based on the assumption that a Labour Government will have to raise £6·3 billion. We all know that this year the Government had to raise £6·8 billion—£500 million more than that. Obviously, if the calculation is made on the basis of averages, Labour's proposed tax will appear to be less than the community charge this year, or the projections for the council tax.
Labour's system is far too complex. It would be impossible to operate. The public will see immediately that Labour has no idea what it is going to do—but perhaps that is Labour's chosen method: perhaps the idea is to introduce a tax that is completely incomprehensible.
It is preposterous for the Opposition to claim that they can introduce such a tax and then complain about the Government's introducing a new tax in 1993. Opposition Members have said that the council tax is too complex and difficult to be rushed through in time for 1 April 1993. They say that there will be too many difficulties with the software, and that local government officials will not be able to work it out properly. Yet, if an election took place next week, in the unlikely event of a Labour victory, Labour would try to introduce its system on 1 April 1992.
That is a joke. Labour cannot, on the one hand, criticise us for giving our system careful consideration and waiting until 1 April 1993 and, on the other hand, announce that they will bring in a scheme in 1992 with no system to back it up.
Our system is clear, fair and progressive. The system that we are being offered as an alternative is unclear; it is nonsense; and it will not work. I have no doubt that, when the time comes and we push our tax through, it will be seen to be fairer than the Labour alternative. It will provide massive rebates for those who are worse off; and it will be welcomed by the majority of the public, who will realise that it is far fairer than the community charge, that it is progressive and that it will work.

Dame Elaine Kellett-Bowman: Everyone who lives in Lancashire will be very glad that the council tax will retain capping, which Labour's alternative would not. That will provide a fallback for the unfortunate citizens of Lancashire, who have a very extravagant Labour council.

Mr. Hind: My hon. Friend has made an important point. The first community charge bill that dropped through my letter box, and those of thousands of my constituents, was for £376, £346 of which was to be spent by the Labour-controlled county council: that was stated on the bill. Residents had to wait four years to elect their council after receiving that bill. That, if anything, reveals the main reasons for the failure of the community charge system. It was deliberately smashed by people who used it cynically for their own electoral purposes.
I wish that system well. Goodbye; good night; we shall see nothing like it again. We must ensure that the new system will not be used as a political tool. The hon. Member for Clackmannan (Mr. O'Neill) may smile; he is probably one of those who encouraged the cynical use of the community charge and never had a good word to say for it. I have not often heard him condemn his hon. Friends who did not pay it.
Ours will be a good tax—and, more important, it will work.

Mr. Peter L. Pike: I know that the hon. Member for Lancashire, West (Mr. Hind) will recognise—being, like me, a Lancashire Member—that only one local authority in Lancashire has been consistently Labour-controlled since the local government reorganisation. I refer to Burnley, whose council I led before I came to the House. Both last year and this, Burnley's poll tax was the lowest in the country.

Mr. Hind: Look at the subsidies.

Mr. Pike: The point is that, with good continuous Labour control, we have been able to provide good services and good local administration.
The current Parliament was elected in 1987, and it will soon have run its term. The Government have already scrapped legislation introduced by previous Conservative Governments, but it is extremely unusual, if not unique, for them to provide, in the Queen's Speech, for the abolition of what was claimed to be the flagship of their opening programme.
One or two Conservative Members have admitted today that they now recognise that they got it wrong in 1987–88. I served on the Committee that dealt with the poll tax legislation. We spent some 200 hours, in Committee and on the Floor of the House, spelling out the fact that the tax was unfair, unworkable and extremely expensive to administer. Every failing that we pointed out has since proved to exist: those failings have emerged every year since its implementation.
The Government have spent billions of pounds on trying to make their tax work—and, of course, it was introduced in Scotland the year before the general election. If a local authority misused the billions of pounds that the Government have misused for that purpose, it would be taken to the district auditors. Many of its councillors would be surcharged, disqualified and probably made bankrupt.
We could have built many schools, sheltered housing schemes and sports centres with those millions of pounds. The meals-on-wheels service and many other services would not have had to be cut. However, that money was squandered. It is outrageous.
The Government claimed in 1987–88 that they had a mandate for their legislation. It is strange, therefore, that in this Queen's Speech the Government say that they intend to introduce a new Local Government Finance Bill to abolish what they did in 1987–88. They claim that they have a mandate for doing that, too, but they cannot have it both ways. My hon. Friend the Member for City of Durham (Mr. Steinberg) said that the legislation is only a shell and that regulations will be needed to implement it. He is right. When this legislation is pushed through, we shall face exactly the same as happened with the poll tax. The Chamber was packed when there were seven orders before the House, with an hour and a half in which to debate them. There were about 46 pages dealing with deductions from wages and benefits and with prison sentences.
This Session is time-limited because of the general election, so the Bill will have to be guillotined, thus curtailing debate and proper consideration of the proposals. Four years ago, the Government said that the poll tax would solve the local government finance problem. They were wrong, so why should we believe that they have got it right on this occasion? Eighty per cent. of my constituents lost out. They live in what was formerly a low rateable value area. People who paid rates amounting to only £200 on a house now have to pay £1,200 in poll tax. The same applies in Pendle, Rossendale and Darwen and Hyndburn.
The Conservatives will lose those seats at the next election. Labour Members of Parliament will be elected to represent those constituencies. Ministers told those people in 1987–88 that the Government had got it right, but now,

four years later, they say, "Sorry, we got it wrong. You had an awfully raw deal out of it, but now we have got it right." Why should people believe them now? They are just as wrong on this occasion as they were on the previous one.
The Local Government Bill provides for compulsory competitive tendering and creeping privatisation. Ministers are not prepared to allow local authorities to lay down conditions of employment, sick pay, holiday pay and other pay levels. It is appalling that in 1991 the only way in which the Government want to save money is by cutting people's pay and working conditions. It is tragic that they should be doing that to local authority employees. There is no employee on the buses who enjoys as good conditions of service as applied before the passing of the Transport Act 1985 in the areas affected by that Act.
I do not believe that local authorities should be capped. I accept that the Government have the right to determine the amount of money that they are prepared to give to local government. There will always be arguments about whether that amount is sufficient, but the amount provided by this Government has always been insufficient. Local authorities have the right to provide the services that they were elected to provide. It is wrong for any local authority not to take into account people's ability to pay. The poll tax failed completely when it came to people's ability to pay.
The Government have never accepted that there are some people who cannot afford to pay for local government services. That applies in every constituency. It is time that the Government accepted that fact and dealt with it. If they did so—and they could do it easily—we should be willing to co-operate with them. The matter could be dealt with speedily, by regulations under the existing legislation. Rebates could be increased. The 100 per cent. rebate to be included in the new Bill could be applied now. The Government could also authorise local authorities to remit payments when they know that people cannot afford to pay.
One case in my constituency highlights the type of thing that happens. Two of my constituents, Mr. and Mrs. Bellis, were sent to prison because they did not pay the poll tax. They had a young child, but the court did not take account of who would look after the child while they were in prison. If magistrates no longer apply the natural principles of justice, it is a bad day for our law. I wrote to the Lord Chancellor about the case. He said that it was nothing to do with him; it was a matter for the Department of the Environment. When I wrote to the Department of the Environment, the reply was that this was the Lord Chancellor's responsibility. This is the Government's responsibility. They need to do something about it. The poll tax must go, and the quicker the better.

Mr. Simon Burns: I welcome the general tenor of the Queen's Speech. It confounds the rumours that have been put about that the Government are running out of steam. It is an imaginative Queen's Speech. It contains a programme that will take us well beyond this Session, after our fourth election victory in March, April or May of 1992.
I intend to concentrate on two issues in the Queen's Speech—the commitment to continue to prepare for the privatisation of the British Railways Board and the


commitment to introduce a new council tax and to establish a review of local government structure in England. My constituents are concerned about British Rail's performance. More than 10,000 people commute from Chelmsford to Liverpool Street each day.

Mr. Deputy Speaker (Mr. Harold Walker): Order. I draw the hon. Gentleman's attention to the fact that we are debating an amendment to the motion on the Queen's Speech. The debate must be confined to the amendment, which relates to the local council tax.

Mr. Burns: I sought guidance earlier, Mr. Deputy Speaker, and was advised that one could speak on anything in the Queen's Speech, but if that is incorrect I shall confine my remarks to the council tax. I was assured that one could discuss any aspect of the Queen's Speech.

Mr. Deputy Speaker: That is not the advice that has been given to me. I am advised that the amendment means that the debate today is confined to the terms of the amendment, which relates to the local council tax.

Mr. Burns: Then I shall curtail my comments on British Rail and deal only with local government finance.
It is a truism to say that nobody likes paying anything for any service. If we could get out of paying for local government, many people would be far happier. They would prefer not to have to make a financial contribution, regardless of their ability to pay. However, it is a fact of life that local government has to be financed by individuals within the local community and by businesses and central Government. What has proved to be a thorny problem, not just during the past four years but for many years before, is the basis for financing all the services provided by local authorities and the level of services that should be provided.
Earlier in the debate, the hon. Member for Eastbourne (Mr. Bellotti) told us of the Liberal Democrats' proposals for a local income tax. I would be the first to admit that I was amazed, enlightened and then staggered by some of the intricacies of the local income tax à la the Liberal Democrats. I had not realised that it was even more complicated than I had been led to believe originally.
The hon. Member for Dagenham (Mr. Gould) told us in the briefest and skimpiest of ways—that is to be expected from the new model Labour party—of the Labour party's pledge to return to a policy of fair rates. I was staggered to learn that the Labour party and the Liberal Democrats gave categorical assurances to the House that rate capping or capping of any sort would not be part of their programmes.
If there were to be a Labour Government or the unlikely event of a Liberal Democrat Government, it would be open house for local authorities to spend and spend, just like Viv Nicholson. There would be an orgy of spending with no restraint, regardless of the damage that it might do to ratepayers, community charge payers or whatever they may be called. I suspect that, when people up and down the country realise the sheer horror of what is being proposed, they will recoil from such an open-ended commitment for massive local government spending.
The level of service provided by local authorities is crucial. It is imperative that the services provided are cost efficient and of the highest quality. If one looks around the

country, one becomes seriously concerned about the definition of a high level of service in certain local authorities.
It is interesting that the Labour party proposes to return to what it calls a fair rates policy. As far as anyone can understand or discover what that cliche means, it seems to be a return to the old, discredited rating system. Like the old saying that success has many fathers, but failure has none, nobody is prepared to claim parenthood of the old rating system. Even the Leader of the Opposition is on record as saying that the rating system is the unfairest of taxes, yet we are led to believe that that is what the Labour party proposes.
We have before us a proposal for a council tax to finance local government. I do not want to disappoint the hon. Member for Eastbourne, but the chances of a local income tax are nil, because his party does not have a cat in hell's chance of ever being returned to government.
One of the most worrying aspects is the danger posed by irresponsible and loony left local authorities. Opposition Members may wave their hands, but for those living under the regime of a loony left council, the follies of its ways cannot be highlighted enough. Day after day they have to live with those policies and spending commitments.
Very few people, especially Conservative Members, would dispute the fact that until the change in party control in Brent it probably had the accolade for one of the looniest of loony councils. It was said of Brent under the Labour council:
If you have a council that is as monumentally incompetent as Brent's has been in the last few years, it rightly gets a major vote of censure from the public.
That forthright common sense does not come from the Conservative Newsline; nor is it a quote from my right hon. Friend the Secretary of State or my hon. Friend the Member for Enfield, Southgate (Mr. Portillo). That common-sense approach to Brent came from the hon. Member for Brent, East (Mr. Livingstone) who, for those who may not remember, was the former leader of the Greater London council.
If that is not enough, a former Member of Parliament and a former councillor in Hackney, Ms. Maureen Colquhoun, said that the only reason for Labour losing seats in Hackney in 1990 was
the total failure of the Labour Group to deliver services. The record is shameful.
If you, Mr. Deputy Speaker, read what that council has got up to over the past four years, you will appreciate fully, just as people in Hackney do, just how shameful the record is.
Equally shameful was an article in The Guardianof 28 February 1991 in which a Councillor Steve French in Lambeth called for victory for Iraq and urged the bombing of Israel. Up and down the country, there are stories of grotesque mismanagement and waste of money by Labour councils.
Nearer to my home in Chelmsford in Essex—that wonderful county which produces Essex man and Essex woman—the Labour-controlled council in the constituency of my hon. Friend the Member for Basildon (Mr. Amess) has spent millions of pounds on a huge new civic centre. Unfortunately, it forgot to plan for the needed new council chamber within that civic centre.
Senior council officials in Birmingham, some earning up to £65,000 a year—that is more than we poor Members


of Parliament get—are living in council properties and paying rents as low as one fifth of market levels. Bradford voted to spend £10,000 to celebrate some obscure strike that took place in the city 100 years before. Charge-capped Islington considered sending 25 children and five teachers to Senegal to study French. Islington could have saved its council and charge payers a great deal of money if it had just asked the advice of a local geography teacher and been told that it is better to go to France to learn French.
I understand that in Dudley, Thomas the Tank Engine has crossed swords with the ideologues of the loony Labour left. Thomas the Tank Engine has been banned from schools and libraries because it is sexist. When reading stories about Thomas the Tank Engine to my daughter, I never thought it sexist. Obviously, there is a new interpretation of the word.
Last year in Harlow, the national anthem was forbidden by the local authority at council entertainments. That is all utter rubbish. Local authorities should not be interfering and wasting charge payers' money in those ridiculous, trite and stupid ways.
I have always believed—I make no apology for it—that any system of financing local government must contain a way of making the local authorities more accountable to those who live within the local area. The Government have decided to introduce the council tax. They listened to the representations that were made and, in their wisdom, decided to make this change as quickly as possible. I wish the Bill well not only on Second Reading but in Committee. Hon. Members will have an opportunity to debate the Bill, but, whatever happens, it is far better to have a system that is more accountable to local people and that will, we hope, put an end to some of the ridiculous mismanagement, inefficiency and wasting of money that has gone on for far too long.

Mr. Eric Illsley: We listen time and again to scare stories about loony left Labour councils, many of which are figments of Conservative Members' imaginations. I respond with one simple example of wasting money. NHS trust hospitals in my health authority area are sending people to Toronto, Paris and all over the world to learn how to do catering and cleaning. The Government should address themselves to such wasting of money and not to fictitious ideas about Thomas the Tank Engine.
Earlier this year, the Government announced the abolition of the poll tax and the introduction of the council tax. That should have been welcome. Hon. Members, including some Conservative Members, have said how divisive and unfair the poll tax was, how difficult it was to collect, with the result that 7 million court summonses are outstanding, and how expensive it was to administer. Hundreds of thousands of pounds were spent on computers and software, only for them to be replaced by new software for the council tax.
The poll tax bore no relation to the ability to pay, offered no accountability because of capping and limits set by the Secretary of State, and imposed a 20 per cent. universal contribution, despite the fact that many people

simply could not afford to pay. The hon. Member for Lancashire, West (Mr. Hind) rightly said that it costs more to collect that contribution than it yields.
The problems of local authorities were exacerbated by the Prime Minister saying that the poll tax was being abolished because it was uncollectable. That was welcomed by the organisations that had campaigned for non-payment. Their problems were further exacerbated by the fact that many people took the Government at their word and simply stopped paying. Many local authorities are issuing court summonses and spending much time and money trying to persuade them that the poll tax has not been abolished and that it will be with us next year and possibly the year after.
It is no wonder that local government finance officers regard the poll tax as a financial nightmare. When we explain each local government Bill to them, they frown and put their heads in their hands. The poll tax is uncollectable and expensive. Much of that expense is caused by the enforcement procedures. My local authority spends a lot of money simply issuing court summonses and trying to pursue people for non-payment.
The abolition of the poll tax is widely welcomed until we consider what will replace it—simply more of the same. Page 2 of the consultation paper refers to the guidelines that the Government considered for the new council tax. They considered the same principles on which they based the poll tax. The consultation paper refers to accountability. How can capping lead to accountability? A local authority is accountable either to the local electorate for the poll tax that it sets or to the Secretary of State because he decides how much it can spend.
How can any tax that has a universal contribution, regardless of income, be fair? How can we consider the fairness of the council tax when the eight bands equate house values with the wealth of an individual and his ability to pay? It is simply nonsense.
The document refers to ease of collection. One bill will be issued for the council tax, and supposedly there will be no register. How will a local authority allocate rebates? How will it, without a list or register, determine whether a household is a single or a two-person household? How can the council tax be easy to collect if the people who are responsible for collecting it simply do not know how much they must collect from each household? Of course there will have to be a register: otherwise, the system will be thrown into chaos.
The document mentions equitable distribution. Once again, the Government considered making everybody pay the council tax but relented and will abolish the 20 per cent. contribution—not before time. As that is so expensive to collect, why not abolish it now?
Conservative Members should realise that capping is based on the standard spending assessment. The cap applies not to what an authority spends but to what the Government believe an authority is entitled to spend. Many times, Labour Members have pointed out the iniquities of the standard spending assessment, which is based on irrelevant data more than 10 years old. The standard spending assessments, which will remain, will lead to further capping and difficulties for many authorities.
The council tax is doomed from the start. It contains not only a personal element but a property element. The personal element of the poll tax led to huge decreases in


census registration and registration for elections. I understand that about I billion people did not register in the recent census.
Council tax bills will be based on a two-person household. Imagine the confusion that there will be among single people who receive a bill based on a two-person household. Pensioners will believe that they have to pay the full amount unless they query it with their local authority or unless the authority has a list. Council offices will be inundated with people querying their bills.
An interesting change has been made, because under the poll tax each adult had to pay, which penalised larger families. As the council tax is based on a two-person household, a household of four or five students or people on income support will pay less.
Many people will not realise that they are entitled to a discount, because, there is no information on how the discount scheme will work. Where will the list be of people who are entitled to a discount? How will a local authority find out who is entitled to a discount? If a person goes to the town hall and says that he qualifies for a discount, the authority will need proof. It will have to compile a list or a register, so the idea that the council tax will not need a register is a complete fiction. It is also wide open to fraud, because many people who are not entitled to a discount may try to claim one from their local authority.
The discount for a single-person household will be set at 25 per cent. Once again, many people will not realise that there is a property element built into that and they will wonder why they do not receive a 50 per cent. discount on the two-person household bill. Many people will not realise that there is a property element built in and that they qualify only for the 25 per cent. discount.
The dual element will be a cause of great confusion, which will be compounded by the proposals for other discounts and rebates for people on low incomes. How can those rebates and discounts be administered without some form of register or list? How is a local authority to react to thousands of claims for rebate? Will it wait to deal with them when the bills drop on the doormats and then try to compile a list of people entitled to a rebate after the council tax has been introduced? Will local authorities be required to compile a register of people entitled to rebates before the council tax is implemented? What is the time scale for implementation?
In a brief to me and my colleagues, my local authority wrote:
In addition, because of its very nature as a combined personal/property tax, movements of individuals within a household will inevitably give rise to changes in liability. Consequently, some details of individuals within properties will need to be kept.
Local authorities themselves are saying that a register will be needed.
We have heard that the amount to be paid by each household will depend on the valuation of the property and that properties will be allocated to one of eight bands. The problems are obvious. There will be different housing valuations across the country for similar types of property.
Whole areas of property will be lumped into bands with no attempt at individual valuations. People in the south-east will be allocated to bands E, F, G and H and will pay the top rates. They will be extremely unhappy that people in the north and the midlands with similar properties will be allocated to lower bands. We shall also find that people in one band will attempt to switch to

another in order to pay a lower rate of council tax. The unfairness associated with the poll tax remains with us, and the anomalies will remain until a fairer system is introduced with a more distinct and accurate valuation.
The problems of valuation and banding will also be compounded by the Government's proposed method of valuation, which is to give the job to people such as estate agents who have a vested interest in ensuring that the valuations are as high as possible. The Inland Revenue will merely oversee the process under which thousands of properties will be given over to estate agents to lump into the banding system. Many estate agents have no expertise in property surveying and many cannot even sell houses, yet they will carry out the banding which will place properties into distinct bands.
The consultation paper states:
Valuation is not an exact science. Two different values may well come up with two different detailed valuations of the same property—providing fertile ground for appeals and disputes.
That is only too true. The same paragraph applies to valuation for banding, especially as properties will be banded in groups of 20,000 or more. There will be appeals and disputes in relation to the council tax ever after. It is interesting that appeals are still in progress for the old rating system from years ago.
As I have said, the abolition of the poll tax is to be welcomed, but even more welcome would be the abolition of the system of grants—the standard spending assessment which is responsible for most of the problems relating to capping and high poll tax bills. Colleagues from neighbouring authorities have drawn attention to the various anomalies in the standard spending assessments and I shall not repeat them. However, one local authority should not receive double the amount of grant received by another only a few miles away for the provision of exactly the same level of service, which is the case at the moment. My authority receives half as much in grant as an authority such as Manchester to provide exactly the same level of teaching service.
The council tax will fail. It needs a register. It has a personal element, discounts and rebates, all of which will have to be listed by the local authorities. It is obvious that some form of register will be needed. The tax is unfair. The basic banding system is unfair, and will lead to appeals and anomalies. All in all, we shall have the same problems as we would have had if the poll tax had remained.

Mrs. Margaret Ewing: I will support the amendment tabled by the Leader of the Opposition. However, it will come as no surprise to the hon. Member for Glasgow, Garscadden (Mr. Dewar) when I say that my party has its own alternative to the council tax, which is referred to in the amendment tabled by myself and my hon. Friends.
The House well knows that the Scottish National party has been vitriolically opposed to the poll tax. Our view has always been that any taxation system must be based on the ability to pay. If a tax is to be fair, if it is to have the support of the people and if it is to be collectable, it must be based on the fundamental principle of ability to pay.
The Government introduced the community charge legislation as a result of total panic about what was happening in Scotland when revaluation came before us again. There were screams and cries from Scottish


Conservative Members, who said that, unless the Government did something, they would lose their seats. The Government did something. They introduced the poll tax and, as a result, lost 11 Scottish Conservative Members in 1987. The introduction of the community charge was a desperate attempt to save the skin of the Conservative party in Scotland, and it failed miserably because of the sense of social justice in the Scottish philosophy. The Scottish people saw the community charge as the most hated tax that had been implemented within their memory.
Other hon. Members have given specific examples of their constituents. I could list many individual examples of how the tax has treated the poorest and most vulnerable in society. I could give examples of how people have been pursued beyond the grave to pull back a few miserly pounds of poll tax payment. Only this weekend, I had a telephone call from a distressed daughter who pointed out that her mother, who was widowed 18 months ago, had just received a threatening letter saying that, if she did not pay £11 for the 16 days between 1 April and 17 April 1989, during which her husband had been alive, poinding action would be taken against her. Such a philosophy is wholly unacceptable and shows how stupid the tax was.
Unfortunately, we again have a Government who are panicking about how to fund local government. They have not thought carefully through how we should deal with the important issue of funding and local authorities. The Government are deeply concerned that they may lose seats south of the border as a result of the community charge. It brought about the demise of the right hon. Member for Finchley (Mrs. Thatcher) and many people panicked. As a result, we have another ill-thought-out form of taxation to pay for local authorities.
It is clear that the Government are determined that the Bill will be on the statute book before the general election. I understand that a timetable motion is to be introduced on Second Reading—a procedure which I have not experienced. All that is intended to clear the decks because the Government think that the council tax may be the remedy to their problems.
The Bill perpetuates all the anomalies, unfairness, regional variations and bureaucracy that made the poll tax unpopular. I suspect that those of us who continue our work as Members of Parliament after the next general election will find our surgeries just as busy with people complaining about the council tax and its anomalies as we have during the past year as a result of the poll tax.
The Government should prove that they are a listening Government and should reconsider the legislation because the Bill will have profound effects on local government and on people's sense of justice and fairness.
My party has consistently argued that the real alternative for funding local authorities is a local income tax. Such a tax operates equitably and effectively elsewhere—in Scandanavia, for example. In Sweden local income tax raises 99·7 per cent., of total government tax revenues, in Finland 98·9 per cent., in Denmark 91·6 per cent., in Norway 89·5 per cent., in Switzerland 86·5 per cent., and so on. Many other European countries operate effectively a local income tax based on the ability to pay. People there feel that their local authorities are accountable and make

decisions in the interests of the community and that the taxation system is based on the ability to pay. I believe that we in Scotland would like to have a similar facility.
The Government's argument is always based on how much it would cost to implement a local income tax system. The Secretary of State for Scotland will recall that, when my colleagues and I met him and the Secretary of State for the Environment during the consultation period on local government funding, we argued our case on local income tax and pursued the issue of costing. After letters to and from Ministers, and having asked parliamentary questions, we estimate that, if Scotland yields 8·3 per cent. of United Kingdom income tax, the full-year effect of a 1p increase in Scottish income tax levels for 1991–92 would be £161·86 million. If we place that figure against what is being raised through the community charge, we see that income tax would have to rise by 3·5p. Most people would be willing to pay such a price to remove the anomalies involving the ability to pay.
I disagree with the idea that someone on my salary should be asked to contribute the same as the person next door, who is probably earning only half as much. I should pay according to my income and my neighbours according to theirs. I want that sense of fairness and justice to be written into the local government finance legislation.
I have heard the Secretary of State for Scotland and some of his ministerial team say that local income tax would not benefit certain groups of people—teachers and hospital porters, for example. We estimate that a teacher earning just over £16,000 a year, with a non-earning spouse, would pay £389 in local income tax, a saving of £175 on the poll tax or £31 on the council tax. A hospital porter earning just over £8,500 a year, with a non-earning spouse, would pay £124 in local income tax, a saving of £440 on the poll tax or £296 on the council tax.
I could give many other examples which would kill once and for all the idea so often propounded by the opponents of local income tax that such a tax would not benefit people on the lowest incomes. Our research, and the examples provided by other countries, show clearly that local income tax would be based on justice and fairness.
In all seriousness, I ask the Government not to deride the strong arguments for a local income tax just because they happen to be advanced by what they call minority parties. The Liberal Democrats and ourselves represent a substantial proportion of public opinion throughout the United Kingdom. The Government have a responsibility to look more carefully at the positive arguments advanced. Those arguments are supported by a broad spectrum of opinion, including people working within the taxation system and people involved in local government administration and finance. They believe that it could work. The Government are making a major error by dismissing local income tax out of hand. To replace one bad tax with another solves no problems whatever.

Mr. Donald Dewar: I am perhaps out of line with some of my hon. Friends in that I quite enjoyed the speech made by the Secretary of State for the Environment, who opened the debate for the Government. Personally, I have no objection to a little bit of Punch and Judy politics and to some knockabout stuff: it is all good fun. I have to say, however that, in the end—and this applies particularly to the right hon.


Gentleman's peroration—I thought that he was rather ridiculous. His argument seemed to be based fearlessly on the refusal to recognise what is already public knowledge about our plans. I confess that I literally gasped with disbelief when I heard him calmly announce his determination to get rid of the poll tax at the first possible opportunity. He told The Scotsmanthe other day,
the only thing that can stop us is the Labour party.
That certainly qualifies him for a prize for brass neck.
The other prize for the evening's debate undoubtedly went to the hon. Member for Berkshire, East (Mr. MacKay) although that, I think, was a prize for innocence and naivety. The hon. Gentleman proudly proclaimed that the new council tax was a perfect compromise, although it was not clear what it was a compromise between. In my experience, perfect compromises are unusual animals, and I fear that the hon. Gentleman is in for a disillusioning experience if the tax is ever brought into practice. Apart from that, I do not think that I learned a great deal from Conservative Members' contributions to the debate—except, perhaps, that the hon. Member for Chelmsford (Mr. Burns), who is not noted for his breadth of vision, does not like Labour councillors, which did not seem to me to advance the argument very much.
I want to examine some of the competing attitudes to, and some of the recent experience in, local government finance. I ought to say straight away that I have some sympathy with some of the Scottish Conservatives. I can make what is perhaps not a usual boast in Scotland: I can claim that some of my best friends are Conservatives. Their agony in recent months and years has been terrible to behold. They have genuinely found it difficult to come to terms with the rout that has taken place—the complete volte-face.
I should explain to the Secretary of State that what has been involved is not so much a loss of dignity as a destruction of credibility. The right hon. Gentleman knows—there can be no doubt about it—that, until recently, as the foundations of the poll tax crashed around his ears, he was still proclaiming it to be a remarkable success and something which was here to stay. Now, I am afraid—if rumour is correct—he is reduced to confiding to any journalist who will listen that he was a dissident from day one, bound unwillingly into the whole scheme by a love of collective responsibility. I am afraid that he is getting very near to the Nuremburg defence of saying that he was only obeying orders. I would find it all a little more convincing had the right hon. Gentleman not peddled the Government's line so enthusiastically, with militant zeal—I hope that he will not resent the term—for so many months.
All my hon. Friends will remember the reception that was given to Labour's alternative to the poll tax. Abuse and scorn were heaped upon it with an intensity of attack that I cannot remember experiencing previously in my political career. That was perfectly understandable, because what we were proposing was so essentially and uniquely horrible. The House will remember that we had the effrontery to propose that we should have a property-based system founded largely on capital valuation and with legal liability falling on the householder alone. Clearly, that was unacceptable and intolerable. We were told in terms that it was a veritable tyranny—Scotland was colonised by vultures and no roof beam in Scotland was free from this plague.
What was unacceptable and intolerable suddenly—just like that—became acceptable and tolerable, as the Conservative party line turned, with a discipline which I found quite remarkable and which was reminiscent of societies that Conservative Members often dismiss contemptuously. A study of the assault made on our plans at the time reveals a number of points that were put forward as incontrovertible arguments against what we were proposing. It is perhaps worth taking a minute or two to invite the Secretary of State to answer those arguments in his reply and to explain how they have been overcome in the new council tax system. That will be particularly interesting to Labour Members, and I look forward to it.
I have here a copy of "Roof tax v poll tax", published by the Scottish Conservative party. Let us start with one or two fundamentals. The document states:
Their new local government tax will be based on the value of your home … The truth is Labour's proposed 'Roof Tax' will be, as the rates were, a tax on your right to live in a house.
The family home. It'll be the family millstone.
How does the new council tax overcome that essential fault?
The document contains a second charge. It states:
council tenants won't laugh when they hear they'll be liable to pay the new tax in addition to their rent.
I must have missed something in the council tax. Some subtlety must have eluded me. I was under the impression that people who rented council houses would have to pay the new council tax in addition to their rents. Clearly I have misunderstood and I am sure that the Secretary of State for Scotland will correct me shortly.
The document also explains
why the youngster with a full time job living at home will once again pay nothing towards local Government services.
While the youngster who leaves home and rents a flat will be clobbered.
It seems that another subtlety has escaped me. What I have just related will look rather familiar to those who examine the Bill that we will debate next week.
I am sure that the Secretary of State will be able to explain the next point to me, because it is so simple. What is even more chilling for the people who have bought their council houses at a discounted price is that they will now be taxed at today's full value. That point was elaborated upon by the then Secretary of State for Scotland, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) who now runs—or rather does not run—our railway system. In a press release dated April 1990, he said:
A council house in Bearsden is likely to have a much higher market value than a council house in Castlemilk. But the income of the council house tenant might be exactly the same. How does Mr. Dewar justify the one having to pay a much higher roof tax than the other?
He continued:
The council tenant who buys his house need also beware of Labour's roof tax. Their liability will not be based on what they have actually paid for their house but what it is deemed to be worth without discount. They may have bought it for £9,000 with full discount, if it is actually worth £30,000 it will be the latter figure that will be used to work out their roof tax … Labour will punish them with a vengeance.
That was a fundamental objection to our plans. How has the Secretary of State met that point in the council tax? [Interruption.]We never accepted that that was an objection. I have quoted from the Conservative Cabinet Minister in charge of local government finance. I want the Secretary of State to explain why he has abandoned the attack. Did he do that on the basis of arrant hypocrisy or because he is a man of no principle who is now putting his principles in his pocket?
The Government have capitulated on the flat rate principle, the property base and on accountability. All we can hear is the sound of Conservative politicians eating their own words. However, that has not encouraged humility, as the Secretary of State for the Environment proved when he opened this debate. The Government have capitulated on principle, but they have made a terrible mess of translating the principle into practice.
In the weeks ahead, we will examine the details of the new council tax. I am sure that the Secretary of State for Scotland will appreciate that I have corresponded with him about the fact that the Local Government Finance Bill is a United Kingdom Bill. I did that on the basis that it is very difficult to scrutinise the Bill's Scottish aspects, complicated and far-reaching as they are, as they impact on a very distinct and separate local government tradition and system within the framework of United Kingdom legislation. I hope that he will use his influence in the usual channels to ensure that there is a decent Scottish input to our debates.
I received a letter from the Secretary of State for Scotland on 30 October in which he confines himself to saying:
I believe that the Scottish interests will be dealt with appropriately.
If we are reduced to a handful of Scottish Back Benchers and perhaps only a couple of Opposition Scottish Back Benchers on the Standing Committee, that will be deeply resented. It will be seen by many people who do not have a partisan political approach to the problems as a blow at the proper parliamentary scrutiny of Scottish legislation. The right hon. Gentleman must bear that point very much in mind.
I now refer to our objections. Understandably, I must state that, in broad terms—as the House will recognise, we have a Second Reading debate and a Committee stage to come—the first objection is very important. The proposed banding system was dealt with at some length by the right hon. Member for Henley (Mr. Heseltine). It is pinched and restricted. It is artificially constrained in a way that ensures that the burden is not fairly distributed and those at the top end of the property range, and very likely to be at the top end of the income range, are being given shelter which is not justified.
The right hon. Member for Henley made a powerful point when he said that all we were doing was trying to introduce an envy tax. He made a strange point, because he said, as though he justified that attack, that, after all, further bands would not raise any more cash. However, as he is always telling us, he does not want local government to raise more cash. It is not just a matter of how much is raised: there is another essential principle, and that is how the burden is distributed. That is the point at issue. I am surprised that someone as acute and as experienced as the right hon. Gentleman does not appreciate that arguments for fairness and justice also enter into the matter.

Mr. Heseltine: If one does not raise more money from the top bands, one does not actually help the people in the lower bands.

Mr. Dewar: Yes, one does, if one broadens the range. At the moment it is 3:1. The richest in the land can pay only three times as much as the person in the most lowly valued, difficult-to-let council house. If one broadens that

range and spreads it more evenly, one gets away from the present situation in which those at the bottom end of the range are paying more than they need to pay because of the way the system has been constructed.
Again I refer to the "Roof tax v poll tax" document. On this particular the Government have got it right, and I am proud that they got it right. The Tories got it absolutely on the nail. That document states:
Labour's message clearly is 'Those on high incomes in high valued properties will make a larger contribution to local services'.
I plead guilty to that. That is a principle which the vast majority of people in this country would endorse. It was the principal objection of many people on very wide and varied incomes to the way in which the poll tax operated.
The arrival of the eighth band, which suggests that the right hon. Gentleman's conscience was at least pricking him, is not enough, and more should be done. Perhaps we will refer later to the blatant dishonesty—I am sorry, I must watch my language; let us say something bordering on the dishonest—of the suggestion that we can have a banding system which avoids for ever the problem of revaluation. I read in the ministerial journals—the Secretary of State for the Environment will certainly know about it—that the Minister of State said that, once a person is in a band, his property would be in it probably for perpetuity. That is the level of the argument. If we go to any local government official and talk to him about local government finance and how the council tax might work, he will say that it is nonsense and a case of trying to muddle through and paper over the cracks simply to make the package a little more presentable for electoral purposes.
The next main point is about the complexity of the system. We are, in the practicalities, preserving many of the characteristics of the poll tax that have plagued and complicated our lives over the past two or three years. We have had a plethora of reduction schemes and concessional allowances—five or six of them—and they will go on. We have the 25 per cent. discount. I recognise why it is attractive. All of us are aware of the problems of someone who was living alone and struggling to maintain a large house, but I am genuinely surprised at Conservative Members' enthusiasm for a benefit that is clearly not targeted.
In Scotland, there are 580,000 homes consisting of a single adult over 16. I do not know how they are made up. Many of them will presumably get the 100 per cent. rebate anyway without having to call upon the discount system. Although there is an assumption that most of those people are little old ladies who live in the circumstances that I described earlier, I suspect that we do not really know who the beneficiaries will be, but if the Government do not know, they should tell us. I have said it before and will say again that I am one such beneficiary, and probably not the sort of beneficiary that was intended when it was decided that a discount would be required. If fairness is to be the test, the discount is neither an efficient nor effective way of targeting help where it is most needed.
In Committee we shall draw attention to the many anomalies that are already beginning to pile up. Let us take one random example. Perhaps the Secretary of State for Scotland will address the logic of the following. Let us imagine two neighbouring houses. The householder in the first earns £30,000. Only one other person lives in the house, his son who is on income support. As a result of his


son's status, that householder automatically gets the 25 per cent. discount. The neighbouring householder, however, earns only £15,000—he lives in exactly the same sort of house, but has only half the income of his neighbour—and, again, only one other person lives in the house, his non-working wife who brings in nothing. That householder would not receive any discount; he would pay the full charge. That is just one of many anomalies in what will be a long list in Committee. The discount system has the potential to run us into a substantial amount of trouble and I believe that very few people will be prepared to defend it in a year or two.
Many people have said, "How wonderful, there will be no register." The hon. Member for Eastwood (Mr. Stewart) cheerfully told the nation on radio the other day, "Of course, there will not be a register, but there will have to be a list." The Convention of Scottish Local Authorities has asked me how the discount system, as distinct from the rebate system, will work. It has said, "We do not have the power to have a statutory canvass, but without a statutory canvass, we do not know the real position. Are we supposed to send out bills for 100 per cent. of the liability to everyone and leave householders to claim the discount if they are entitled to 25 per cent. off the full cost because they are single householders? If the bill is to be calculated on a daily rate and someone's auntie comes to stay for a couple of months in the middle of the year, what about all the complications in adjusting for that and how do we account for the period for which someone has lost the discount? If we calculate bills on that basis, the bills of all the affected people will have to be reissued." I am not making pedantic points when I refer to all those complexities and difficulties which are now beginning to bite in a way that I find worrying.

Mr. Ian Bruce: I have read Labour's document, which is entitled "Fair Rates", in which the Labour party did not tackle the question of how it would deal with houses in multiple occupation or refer to salary levels. How would the hon. Gentleman's party cope with that?

Mr. Dewar: Our view is simple. We should not have a discount and rebate system. We should have simply a rebate system in which a flexible, generous and realistically tapered rebate takes account of the incomes of the people in any house. All the available funds should be targeted in that way to ensure that we achieve the best social return on the available resources—[Interruption.] If Conservative Members think that I am making a partisan point, I invite the Secretary of State for the Environment to move beyond the Municipal Journal. Why not do something daring and take the Local Government Chronicle? If the right hon. Gentleman had read the Chronicle this month, he would have seen the leader headed,
To introduce the poll tax is a mistake, to bring in the council tax is a disaster".
I will favour the right hon. Gentleman by quoting one thought that was expressed in that article:
If the single person discount remains a feature of the tax they will have to create a register—a point Michael Heseltine will eventually have to acknowledge. The discount—the Achilles heel of the system—would be better abandoned now rather than later.
Conservative Members would be well advised to heed those words because all the contact that I have had with local government—I am not talking about Labour

councillors, but about impartial experts—has shown that those experts believe that the council tax will eventually run into such trouble that it will become unworkable.
I wish to make a simple plea about the 20 per cent. rule. We listened to the hon. Member for Lancashire, West (Mr. Hind)—we often must do so—and he defended the council tax with all the conviction with which he defended the poll tax just a few months ago. To be fair, he echoed his party's line when he said that of course the 20 per cent. rule has turned out to be a social disaster and an indefensible imposition. As the Audit Commission said, it will cost considerably more to collect than the net yield to the Treasury. We cannot in justice defend it and it does not make any financial sense—to use a good accountant's term, it is imprudent.
Why does not that rule go in 1992 instead of limping on until April 1993? I find that people cannot comprehend why it will not go in the forthcoming legislation. They do not understand the basis of the argument and they ask me to explain the Government's position. I am not, perhaps, the best person to do that. Perhaps I sometimes do that job inadequately, in the view of any Conservative commentator. But on this case, I cannot give it a try—that is the point. Having been told that the Government have conceded that the whole thing is nonsense, I cannot begin to understand why we are not getting rid of it now, taking the strain off last year's poll tax, which is becoming intolerable. I hope that the Secretary of State can help me on that point.
It is necessary to cut through the confusion and to attack the mess of local government finance which is the legacy of the past few years of Conservative rule. We must find a way of distributing the burden more fairly. In Scotland, we have a valuation base which is comparatively up to date—perhaps that is an advantage which we have over the rest of the country—but we should build upon that base. We should kill the poll tax as quickly as we can. We must then continue with a rolling programme of reform that takes us away from the narrow concept of notional rents. We must build in the kind of rebate system that the hon. Member for South Dorset (Mr. Bruce) tempted me to describe—a rebate system which concentrates on people's ability to pay and which is not concerned with an artificial concept of status.
If we took the Labour way, it would be fairer, and I can quickly give some reasons. The broader property base which we would introduce would mean a fairer distribution of the burden. As I understand it—of course, I am open to correction—the discount system which Conservative Members have praised to the sky will be entirely financed within the system, so others who are not getting the 25 per cent. discount will pay more than they would otherwise do. The savings resulting from the administrative efficiency of the new system will largely be dissipated by the effects of the problems to which I referred.
My experience is that a change would bring a sense of relief. The people in my part of the world, and I believe in the United Kingdom as a whole, are weary of the bitterness and frustration that the poll tax has brought. They fear that they are now looking at a successor tax which is designed simply to allow the Government to muddle through to the next election. They want a fair system which is practicable and workable—an acceptable base for genuine local democracy and the delivery of


services that are the mark of a civilised society. That is what the Labour party intends to bring in after the next election.

The Secretary of State for Scotland (Mr. Ian Lang): Charm was never the strong suit of the hon. Member for Glasgow, Garscadden (Mr. Dewar)—indeed, I think that he is wearing his only suit. What a dismal, doleful, baleful lament of a speech we had from him. Labour knows, and the long faces around the hon. Gentleman confirm, that the council tax is a winner and that we have found in three months the solution that has eluded Labour for three years. We have worked our way directly to a fair, simple and durable solution while Labour has wandered around the highways and byways throwing up and discarding enough nutty ideas to revive the Monty Python show.
We are indebted to the Opposition for tabling the amendment to the Loyal Address which has enabled this subject to be debated and which enables us to prove that we have the best solution for local government funding. It is not often that the Opposition play to the Government's strengths, but, as my hon. Friend the Member for Batley and Spen (Mrs. Peacock) said, the council tax is a simple and fair tax, and she was right to welcome its rebate scheme and its transitional relief.
My hon. Friend the Member for Chelmsford (Mr. Burns) identified the efficiency of administration that the council tax will bring. My hon. Friend the Member for Berkshire, East (Mr. MacKay) welcomed the discounts for students and others. My hon. Friend the Member for Lancashire, West (Mr. Hind) welcomed the banding and the single bills for households. My hon. Friends the Members for Spelthorne (Mr. Wilshire) and for Nottingham, South (Mr. Brandon-Bravo), among others, welcomed the capping provisions to protect residents of profligate councils.
The hon. Member for Eastbourne (Mr. Bellotti) raised, in a passing aside, the question of local income tax. I was most impressed by the effective way in which my hon. Friend the Member for Chelmsford destroyed the hon. Gentleman's case during a short intervention. The hon. Gentleman was wrong to say that we had failed to consult on our proposals for the council tax. We invited hon. Members from all Opposition parties to consult and debate with us the best form of taxation to replace the community charge. Indeed, Liberal Democrat Members took part in those discussions, as did SNP Members. Only the Opposition, who proclaim in their paper "Fair Rates" their willingness to discuss their proposals, failed to take part when the invitation to consult was issued.
The hon. Member for Garscadden complained that the provisions for Scotland and for England were included in the same Bill. Just a few years ago he complained about the exact opposite—that the provisions for the community charge in Scotland were in a separate Bill from those for England and Wales. I note his comments about the representation of Scottish Labour Members on the Standing Committee, but that is a matter not for me, but for the Committee of Selection, which I am sure will hear his words.

Mr. Nellist: rose——

Mr. Lang: I give way to the hon. Gentleman, who is an endangered species on the Opposition Benches as he is one of the few who still speak their mind.

Mr. Nellist: As the provisions for Scotland and for England and Wales are contained in the same Bill, can the right hon. Gentleman explain why the schedules relating to imprisonment as an enforcement penalty still apply to England and Wales, whereas the Debtors (Scotland) Act 1987 abolished that penalty for Scotland? In England and Wales, people may still be imprisoned if they do not pay their council tax.

Mr. Lang: The hon. Gentleman has identified differences between Scotland and England which will persist in the new Bill. That underlines the fact that the one Bill will have the capacity to cater for both Scotland and England. One of the advantages of the Scottish arrangement is that it does not create martyrs, and the hon. Gentleman should know all about that.
The hon. Member for Garscadden raised the issue of discounts and exemptions. It is at the core of our proposals that single-person households should pay less than households comprising two or more adults. It was the failure of domestic rates to take any account of the number of people living in a property which, above all, led to the system being rejected by the public as an acceptable means of raising local government revenue.
In our consultation paper, and now in the Bill, we have recognised further that there will be certain circumstances in which it would be inappropriate for members of a household to add to that household's bill. Those are the cases which, for convenience, we have termed "status discounts". The Bill therefore provides that students, student nurses, apprentices, youth trainees and other categories, who are currently only partially exempt from the community charge, will not, if they are resident in a dwelling, add to the council tax liability of that dwelling.

Mr. Graham: Will the Secretary of State say now why he will not give a 100 per cent. rebate to those people who genuinely cannot pay the poll tax? Why not rescue them from the hell hole created for them by the Government?

Mr. Lang: The hon. Gentleman knows that those on income support were given increased income support to enable them to pay their 20 per cent. liability for the community charge. Labour Members, locally and nationally, have led those people astray, so that they are now facing financial difficulties and are unable to pay.

Mr. Dewar: Would it be a convenient moment for the right hon. Gentleman to answer one of the questions that I asked? Will he explain why, given that the theory has been abandoned, and given that the poll tax is ultimately to go, the 20 per cent. rule cannot be abolished in the council tax Bill with effect from April 1992?

Mr. Lang: The hon. Gentleman can get rid of the 20 per cent. rule quickly by helping us to abolish the community charge and then the package will disappear altogether.
The Opposition call their proposal "Fair Rates", a contradiction in terms if ever there was one. One might as well speak of even-handed socialism. But just as they have done throughout the past three years, we find the Opposition spokesmen contradicting each other. The hon. Member for Derby, South (Mrs. Beckett) now says that there is no question but that Labour will replace the


council tax with fair rates. But the hon. Member for Sheffield, Brightside (Mr. Blunkett) says that Labour will amend the council tax. The hon. Member for Dagenham (Mr. Gould), the man responsible, as on so many other details, is really not very sure. Even by Labour standards the pantomime season has come early this year.
But unfair rates is what is on the table, along with the tattered remnants of more than 60 other proposals that went before. What a retrograde disaster it represents. After all these years, has the Labour party not learnt that people pay their taxes in sorrow, but they paid their rates in anger? How does the Labour party's policy stand up to examination by comparison with the council tax? Fundamental to the stability of a system of taxation is the level at which people are asked to pay, and the switch from local to central taxation achieved by my right hon. Friend the Chancellor in his Budget was widely welcomed because it recognised that the tax burden had become too high for any system to sustain, and that is why he took steps to reduce it.
That has been welcomed everywhere except on the Opposition Benches. Not for Opposition Members the 14 per cent. contribution from local residents that we have achieved—the figure in Scotland is even lower—but, on the contrary, a commitment to raise it to 20 per cent. The general secretary of the Scottish Trades Union Congress even proposed an increase of up to 50 per cent.
But what does that mean for the local residents? Surely not cuts in income tax by a Labour Government. One has only to mouth that thought to recognise its absurdity. What it means is higher bills for local taxpayers. That is what the Labour party means when it says it wants councils to raise more of the money that they spend.
In the past 12 years, despite the protestations of the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), the funding of Scottish local authorities by Government has risen in real terms by 10 per cent. but spending has risen by no less than 26 per cent. That is the reality of Labour in action in local government. Labour's policy means giving spendthrift councils the green light to send tax bills soaring even further with devastating results for millions of people.
The Labour party claims that its new fair rates policy is easy to administer. "Fair Rates" says that Labour wants to cut unnecessary bureaucracy from local government finance, an admirable objective, but it seems that the Labour party cannot help itself. It could not even make up its mind. Faced with four alternative approaches to valuation—whether it should be based on capital values, rental values, maintenance costs or rebuilding costs—its choice was not to go for one of them, or even a mixture of two of them, but to go for all four of them.

Mr. John Home Robertson: On the subject of making up his mind or the minds of parties in Scotland, can the Secretary of State say whether the Conservative candidate in Kincardine and Deeside supports that aspect of Conservative party policy?

Mr. Lang: My friend the candidate, soon to be my hon. Friend the Member for Kincardine and Deeside, supports me and my hon. Friends on that policy as on so many other policies.
But what the Opposition call a modernised valuation system has more components than a car manufactured in the constituency of the hon. Member for Dagenham, and

on top of that we are promised a revaluation every year. That policy is to simplicity what the Leader of the Opposition is to brevity. It would not have the confidence of the people, so it would never work.
When we come to banding we find that the Labour party is incapable of making up its mind. My right hon. Friend the Secretary of State asked today whether it supported banding but received no answer. We referred to its "Fair Rates" document where it argues for it but carefully puts in the word "perhaps". The hon. Member for Garscadden says that banding protects the rich and the hon. Member for Dagenham says that the Government are clobbering the rich, and still we do not know.
The Labour party claims that its policies would be fairer, but the council tax brings fairness to single people with discounts. They are not the rich bachelors or the yuppies that the Labour party fears; two thirds of single people entitled to discounts will be over 60, single pensioners, widows and widowers, and many more are single parents. Where is the justice for them in a rates policy?
If businesses think that they would escape, protected by a fair and stable business rate, they had better think again. Labour says that it will reverse every step that the Government have taken to protect businesses, and would leave them to the mercy of Labour's own local councils. Once again, city centre premises would be boarded up, as business after business moved out of centres, driven away by runaway rates bills.

Mr. Bellotti: The Secretary of State said that those people who were to receive discounts would be separately marked on the lists. Will he explain to the House the difference between a register and a list?

Mr. Lang: There is all the difference in the world between a register and a list. A register is a statutory designated body that is a basis for designating liability, and a list is a source of administrative efficiency for the use of the local authority. If the hon. Gentleman serves on the Committee that is to consider the Bill, he will be able to reassure himself as to the way that works.
Another refinement and contrast between the council tax and Labour's rates policy is the control, or lack of it, that Labour would exercise over excessive spending levels. According to Labour's policy document, it would abolish capping. Today, the hon. Member for Dagenham confirmed that, and the hon. Member for Eastbourne joined in on behalf of the Liberal Democrats. They were too modest, because it was a Labour Government who invented capping—back in the 1970s, when Labour said that the party was over. In effect, the party had not even started. It was Labour Ministers who told local authorities that there was to be
severe restraint in expenditure in the national interest.
We all know that without capping there would be an explosion in local authority spending and spiralling local tax bills.
What do we find in Labour's new "Fair Rates" policy? Where is the smack of firm government? Labour would throw away all controls, and, according to the hon. Member for Dagenham, would do all it could to encourage councils "to behave sensibly." The only people who would be encouraged by that would be councillors in areas such as Lambeth, Liverpool, and Lothian. For them,


the party would be on again. It would be spend, spend, spend. For the rest of us, that can clearly be seen as a policy of catastrophe.
My hon. Friend the Member for Spelthorne suggested that regional variations in house prices should be taken into account in regional banding. That overlooks the protection that is built in to the dampened banding system. I suggest to those who talk of regional banding that they look at the protection that the banding system will offer to people living in London and the south-east. Do we really want a system in which a couple——

Mr. Dewar: Will the Secretary of State explain exactly what is a "dampened banding system"?

Mr. Lang: Precisely the system that the hon. Gentleman, if I recall his words, said was restricting and constraining. It narrows the differential, so that those in the top band are not forced to pay more than three times those in the bottom band. I regard that form of protection as highly desirable and an important part of our proposals.
Limiting the range of bills will give all the protection that London and the south-east needs. Bills there will be reasonable if local authorities spend sensibly. That is critical. It is not the Government who play havoc with people's local tax bills but the Lambeths, Liverpools, and Lothians of this world. We have not and, I repeat, we will not allow local authorities to spend irresponsibly and profligately—and we mean what we say.
No local authority will be allowed to undermine the principles of sound and prudent public sector management to which my right hon. Friend the Chancellor of the Exchequer and all the other members of the Government are committed. I repeat that we will maintain firm vigilance over local authority spending. Where necessary, we will cap, and cap vigorously.
It is nonsense to suppose that local authorities should be let off the financial hook for flagrant mismanagement of their responsibilities. They can and will be called to account. It is in the interests of the ordinary citizen that that should be so. Why should the people of Lambeth be subjected to savage bills because their local authority fails to collect rents, the community charge, and even outstanding rates arrears going back over many years? Why should the people of Liverpool have to pay for the self-inflicted deficits of their local council, and why should the people of Lothian suffer the same dismal experience?
Let us examine the collection rates for 1990–91. The five worst councils are Hackney, with 55 per cent.—Labour; Lambeth, with 67 per cent.—Labour; Liverpool, with 68 per cent.—Labour; Islington, with 69 per cent.—Labour; and Newham, with 71 per cent.—Labour. In Scotland, the worst two regions are Strathclyde, with 71 per cent.—Labour; and Lothian, with 75 per cent.—Labour.
Government is about responsibility, and local government is about local responsibility. We in government have a duty to ensure that local responsibility is not abused, and we intend to carry out that duty.
One of the more unedifying spectacles that emerged from the community charge was the flaunting display of the "can pay, won't pay" brigade. "Can pay, won't pay" is shorthand: written out in full, their credo was, "We have the money to make our proper contribution to the cost of essential local services, but, because we wish to indulge in

political point-scoring, we will withhold that contribution—knowing full well that by doing so we will force local authorities either to increase charges for the great majority of law-abiding citizens, or to cut services." Put in such terms, that is a cheap and tawdry act, and the whole campaign is rightly reviled by most people. Even the Scottish National party has been forced to acknowledge that it hitched its colours to a vote loser.
Such action becomes particularly distasteful when it is carried out by elected representatives. In our view, it is entirely unacceptable for them to be allowed to continue to exercise any influence over the amount of local taxation that they require their electorate to pay. Such a degree of hypocrisy cannot be tolerated; it is morally indefensible, and in defiance of the rule of law. We are saying to those councillors, "Won't pay, can't say"; in other words, "If you are not prepared to obey the law and pay your rightful contribution to the cost of the local services which, as locally elected representatives, you have a say in providing, it is unjustifiable for you to have any influence, through your votes, on the amount of local tax that is levied in your area."
Today—diffidently, quietly and from sedentary positions—Opposition Members agreed with that. Yes, whispered the hon. Member for Dagenham, they would support us. We welcome that deathbed repentance, if it lasts through the Committee stage. But what a pity that, when the heat was on—when the law of the land was being challenged by Labour councillors up and down the country, and by Members of Parliament—the Opposition Front Bench was found wanting, and failed to stand up to the rule of law.
When the Opposition try to throw back at us arguments about increasing accountability, I say this to them. Yes, we believe in local accountability: we have tried to strengthen it, first through funding mechanisms and now through contemplating single-tier authorities. But where is the accountability in a policy that abrogates responsibility, or in a Government who do the same? Where is the accountability in a Government who take all controls off local authorities, and let spending rip; who switch a larger burden of tax-raising to profligate authorities and abandon the interests of oppressed residents? Where is the accountability in a policy that fails to take account of the number of people living in a house, and leaves businesses without a vote and at the mercy of local authorities?
When asked to hold themselves accountable to their residents, local authorities chose instead to clobber them with a 30 per cent. increase in this year's burden and inadequate efforts to collect until it was far too late. There is no sense of accountability in a council such as Edinburgh, which sought last year to tax residents at £584 per head.
The fact is that Labour wants to keep the poll tax so that it can attack us with it. Labour wants to hide behind it, to disguise the incompetence and extravagance of Labour authorities and their lack of an alternative. If I am wrong, Labour can prove it by helping the Local Government Finance Bill on to the statute book. That is the acid test. How can the nation judge Labour's sincerity if Labour is determined to resist? The truth is that Labour knows that it has no creditable system with which to replace our proposals.
Our council tax forms part of a major undertaking on which we have embarked to reform the structure, funding and function of local government throughout Britain. It is


fair; it spreads the burden evenly, providing proper discounts and proper control of local authorities. I urge the House to throw out the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 198, Noes 326.

Division No. 1]
[10 pm


AYES


Adams, Mrs Irene (Paisley, N.)
Godman, Dr Norman A.


Allen, Graham
Golding, Mrs Llin


Alton, David
Gordon, Mildred


Archer, Rt Hon Peter
Gould, Bryan


Armstrong, Hilary
Graham, Thomas


Ashdown, Rt Hon Paddy
Grant, Bernie (Tottenham)


Ashley, Rt Hon Jack
Griffiths, Nigel (Edinburgh S)


Ashton, Joe
Griffiths, Win (Bridgend)


Banks, Tony (Newham NW)
Grocott, Bruce


Barnes, Harry (Derbyshire NE)
Hain, Peter


Barnes, Mrs Rosie (Greenwich)
Hardy, Peter


Beckett, Margaret
Harman, Ms Harriet


Beith, A. J.
Haynes, Frank


Bellotti, David
Heal, Mrs Sylvia


Benn, Rt Hon Tony
Henderson, Doug


Bennett, A. F. (D'nt'n &amp; R'dish)
Hinchliffe, David


Bermingham, Gerald
Hoey, Kate (Vauxhall)


Bidwell, Sydney
Hogg, N. (C'nauld &amp; Kilsyth)


Blair, Tony
Home Robertson, John


Blunkett, David
Howell, Rt Hon D. (S'heath)


Boateng, Paul
Howells, Geraint

 Boyes, Roland
Howells, Dr. Kim (Pontypridd)


Bradley, Keith
Hoyle, Doug


Bray, Dr Jeremy
Hughes, John (Coventry NE)


Brown, Gordon (D'mline E)
Hughes, Roy (Newport E)


Brown, Nicholas (Newcastle E)
Illsley, Eric


Brown, Ron (Edinburgh Leith)
Ingram, Adam


Caborn, Richard
Janner, Greville


Callaghan, Jim
Jones, Barry (Alyn &amp; Deeside)


Campbell, Menzies (Fife NE)
Jones, Ieuan (Ynys Môn)


Campbell-Savours, D. N.
Jones, Martyn (Clwyd S W)


Canavan, Dennis
Kaufman, Rt Hon Gerald


Carlile, Alex (Mont'g)
Kinnock, Rt Hon Neil


Cartwright, John
Kirkwood, Archy


Clark, Dr David (S Shields)
Lambie, David


Clay, Bob
Lamond, James


Cohen, Harry
Leighton, Ron


Corbyn, Jeremy Lewis, Terry


Cousins, Jim
Litherland, Robert


Crowther, Stan
Livsey, Richard


Cryer, Bob
Lloyd, Tony (Stretford)


Cunningham, Dr John
Lofthouse, Geoffrey


Darling, Alistair
Loyden, Eddie


Davies, Rt Hon Denzil (Llanelli)
McAllion, John


Davies, Ron (Caerphilly)
McAvoy, Thomas


Davis, Terry (B'ham Hodge H'l)
McKay, Allen (Barnsley West)


Dewar, Donald
McKelvey, William


Dixon, Don
McLeish, Henry


Dobson, Frank
Maclennan, Robert


Duffy, Sir A. E. P.
McMaster, Gordon


Dunnachie, Jimmy
McWilliam, John


Dunwoody, Hon Mrs Gwyneth
Madden, Max


Eadie, Alexander
Mahon, Mrs Alice


Ewing, Harry (Falkirk E)
Marek, Dr John


Ewing, Mrs Margaret (Moray)
Marshall, David (Shettleston)


Faulds, Andrew
Marshall, Jim (Leicester S)


Fearn, Ronald
Martin, Michael J. (Springburn)


Field, Frank (Birkenhead)
Martlew, Eric


Fields, Terry (L'pool B G'n)
Meacher, Michael


Fisher, Mark
Meale, Alan


Flannery, Martin
Michael, Alun


Flynn, Paul
Michie, Bill (Sheffield Heeley)


Foot, Rt Hon Michael
Michie, Mrs Ray (Arg'l &amp; Bute)


Foster, Derek
Morgan, Rhodri


Foulkes, George
Morley, Elliot


Fraser, John
Morris, Rt Hon A. (W'shawe)


Galloway, George
Morris, Rt Hon J. (Aberavon)


Garrett, John (Norwich South)
Mullin, Chris


Garrett, Ted (Wallsend)
Murphy, Paul


George, Bruce
Nellist, Dave


Gilbert, Rt Hon Dr John
Oakes, Rt Hon Gordon



 
O'Brien, William
Smith, C. (Isl'ton &amp; F'bury)


O'Neill, Martin
Smith, Rt Hon J. (Monk'ds E)


Orme, Rt Hon Stanley
Snape, Peter


Parry, Robert
Soley, Clive


Patchett, Terry
Spearing, Nigel


Pike, Peter L.
Steel, Rt Hon Sir David


Powell, Ray (Ogmore)
Steinberg, Gerry


Prescott, John
Strang, Gavin


Primarolo, Dawn
Straw, Jack


Radice, Giles
Taylor, Mrs Ann (Dewsbury)


Randall, Stuart
Taylor, Matthew (Truro)


Redmond, Martin
Thompson, Jack (Wansbeck)


Rees, Rt Hon Merlyn
Vaz, Keith


Reid, Dr John
Wallace, James


Richardson, Jo
Walley, Joan


Robertson, George
Warded, Gareth (Gower)


Robinson, Geoffrey
Watson, Mike (Glasgow, C)


Rogers, Allan
Wigley, Dafydd


Rooker, Jeff
Williams, Rt Hon Alan


Ross, Ernie (Dundee W)
Williams, Alan W. (Carm'then)


Rowlands, Ted
Wilson, Brian


Ruddock, Joan
Winnick, David


Salmond, Alex
Wise, Mrs Audrey


Sedgemore, Brian
Worthington, Tony


Sheerman, Barry
Wray, Jimmy


Sheldon, Rt Hon Robert
Young, David (Bolton SE)


Shore, Rt Hon Peter



Short, Clare
Tellers for the Ayes:


Skinner, Dennis
Mr. Robert N. Wareing and


Smith, Andrew (Oxford E)
Mr. Ken Eastham.




NOES


Adley, Robert
Carlisle, John, (Luton N)


Aitken, Jonathan
Carlisle, Kenneth (Lincoln)


Alexander, Richard
Carrington, Matthew


Alison, Rt Hon Michael
Carttiss, Michael


Amery, Rt Hon Julian
Cash, William


Amess, David
Chalker, Rt Hon Mrs Lynda


Amos, Alan
Channon, Rt Hon Paul


Arbuthnot, James
Chapman, Sydney


Arnold, Jacques (Gravesham)
Chope, Christopher


Arnold, Sir Thomas
Churchill, Mr


Ashby, David
Clark, Dr Michael (Rochford)


Aspinwall, Jack
Clark, Rt Hon Sir William


Atkins, Robert
Clarke, Rt Hon K. (Rushcliffe)


Baker, Nicholas (Dorset N)
Coombs, Anthony (Wyre F'rest)


Baldry, Tony
Coombs, Simon (Swindon)


Banks, Robert (Harrogate)
Cope, Rt Hon Sir John


Batiste, Spencer
Cormack, Patrick


Beaumont-Dark, Anthony
Couchman, James


Beggs, Roy
Cran, James


Bellingham, Henry
Critchley, Julian


Bendall, Vivian
Currie, Mrs Edwina


Bennett, Nicholas (Pembroke)
Curry, David


Benyon, W.
Davies, Q. (Stamf'd &amp; Spald'g)


Biffen, Rt Hon John
Davis, David (Boothferry)


Blackburn, Dr John G.
Day, Stephen


Blaker, Rt Hon Sir Peter
Dickens, Geoffrey


Body, Sir Richard
Dicks, Terry


Bonsor, Sir Nicholas
Dorrell, Stephen


Boscawen, Hon Robert
Douglas-Hamilton, Lord James


Boswell, Tim
Dover, Den


Bottomley, Peter
Dunn, Bob


Bottomley, Mrs Virginia
Durant, Sir Anthony


Bowden, A. (Brighton K'pto'n)
Dykes, Hugh


Bowden, Gerald (Dulwich)
Emery, Sir Peter


Bowis, John
Evans, David (Welwyn Hatf'd)


Boyson, Rt Hon Dr Sir Rhodes
Evennett, David


Braine, Rt Hon Sir Bernard
Fairbairn, Sir Nicholas


Brandon-Bravo, Martin
Farr, Sir John


Brazier, Julian
Favell, Tony


Bright, Graham
Finsberg, Sir Geoffrey


Brown, Michael (Brigg &amp; Cl't's)
Fishburn, John Dudley


Bruce, Ian (Dorset South)
Fookes, Dame Janet


Buck, Sir Antony
Forman, Nigel


Budgen, Nicholas
Forsyth, Michael (Stirling)


Burns, Simon
Forsythe, Clifford (Antrim S)


Burt, Alistair
Forth, Eric


Butler, Chris
Fowler, Rt Hon Sir Norman


Butterfill, John
Fox, Sir Marcus






Franks, Cecil
Jones, Robert B (Herts W)


Freeman, Roger
Jopling, Rt Hon Michael


French, Douglas
Kellett-Bowman, Dame Elaine


Fry, Peter
Kilfedder, James


Gale, Roger
King, Roger (B'ham N'thfield)


Gardiner, Sir George
King, Rt Hon Tom (Bridgwater)


Garel-Jones, Tristan
Kirkhope, Timothy


Gill, Christopher
Knapman, Roger


Gilmour, Rt Hon Sir Ian
Knight, Greg (Derby North)


Glyn, Dr Sir Alan
Knight, Dame Jill (Edgbaston)


Goodhart, Sir Philip
Knowles, Michael


Goodlad, Alastair
Knox, David


Goodson-Wickes, Dr Charles
Lamont, Rt Hon Norman


Gorman, Mrs Teresa
Lang, Rt Hon Ian


Gorst, John
Lawson, Rt Hon Nigel


Grant, Sir Anthony (CambsSW)
Lee, John (Pendle)


Greenway, Harry (Eating N)
Leigh, Edward (Gainsbor'gh)


Greenway, John (Ryedale)
Lennox-Boyd, Hon Mark


Gregory, Conal
Lester, Jim (Broxtowe)


Griffiths, Sir Eldon (Bury St E')
Lloyd, Peter (Fareham)


Griffiths, Peter (Portsmouth N)
Lord, Michael


Grist, Ian
Luce, Rt Hon Sir Richard


Ground, Patrick
Lyell, Rt Hon Sir Nicholas


Hague, William
McCrindle, Sir Robert


Hamilton, Rt Hon Archie
MacGregor, Rt Hon John


Hamilton, Neil (Tatton)
MacKay, Andrew (E Berkshire)


Hampson, Dr Keith
Maclean, David


Hanley, Jeremy
McLoughlin, Patrick


Hannam, John
McNair-Wilson, Sir Michael


Hargreaves, A. (B'ham H'll Gr')
McNair-Wilson, Sir Patrick


Hargreaves, Ken (Hyndburn)
Madel, David


Harris, David
Malins, Humfrey


Haselhurst, Alan
Mans, Keith


Hawkins, Christopher
Maples, John


Hayes, Jerry
Marland, Paul


Hayhoe, Rt Hon Sir Barney
Marlow, Tony


Hayward, Robert
Marshall, John (Hendon S)


Heath, Rt Hon Edward
Marshall, Sir Michael (Arundel)


Heathcoat-Amory, David
Martin, David (Portsmouth S)


Heseltine, Rt Hon Michael
Mates, Michael


Hicks, Mrs Maureen (Wolv' NE)
Maxwell-Hyslop, Robin


Higgins, Rt Hon Terence L.
Mayhew, Rt Hon Sir Patrick


Hill, James
Meyer, Sir Anthony


Hind, Kenneth
Miller, Sir Hal


Hogg, Hon Douglas (Gr'th'm)
Mills, Iain


Hordern, Sir Peter
Miscampbell, Norman


Howard, Rt Hon Michael
Mitchell, Andrew (Gedling)


Howarth, Alan (Strat'd-on-A)
Mitchell, Sir David


Howarth, G. (Cannock &amp; B'wd)
Moate, Roger


Howe, Rt Hon Sir Geoffrey
Molyneaux, Rt Hon James


Howell, Rt Hon David (G'dford)
Monro, Sir Hector


Hunt, Rt Hon David Montgomery, Sir Fergus


Hunt, Sir John (Ravensbourne)
Moore, Rt Hon John


Hunter, Andrew
Morris, M (N'hampton S)


Irvine, Michael
Moss, Malcolm


Irving, Sir Charles
Mudd, David


Jackson, Robert
Needham, Richard


Janman, Tim
Nelson, Anthony


Jessel, Toby
Neubert, Sir Michael


Jones, Gwilym (Cardiff N)
Newton, Rt Hon Tony





Nicholls, Patrick
Stevens, Lewis


Nicholson, David (Taunton)
Stewart, Andy (Sherwood)


Onslow, Rt Hon Cranley
Stewart, Rt Hon Sir Ian


Oppenheim, Phillip
Stokes, Sir John


Page, Richard
Sumberg, David


Paice, James
Summerson, Hugo


Parkinson, Rt Hon Cecil
Tapsell, Sir Peter


Patnick, Irvine
Taylor, Ian (Esher)


Patten, Rt Hon Chris (Bath)
Taylor, Sir Teddy


Patten, Rt Hon John
Tebbit, Rt Hon Norman


Pattie, Rt Hon Sir Geoffrey
Temple-Morris, Peter


Pawsey, James
Thompson, D. (Calder Valley)


Peacock, Mrs Elizabeth
Thompson, Patrick (Norwich N)


Porter, Barry (Wirral S)
Thorne, Neil


Porter, David (Waveney)
Thornton, Malcolm


Portillo, Michael
Thurnham, Peter


Powell, William (Corby)
Townend, John (Brildlington)


Price, Sir David
Townsend, Cyril D. (B'heath)


Raffan, Keith
Tracey, Richard


Raison, Rt Hon Sir Timothy
Tredinnick, David


Rathbone, Tim
Trimble, David


Redwood, John
Trippier, David


Riddick, Graham
Trotter, Neville


Ridsdale, Sir Julian
Twinn, Dr Ian


Rifkind, Rt Hon Malcolm
Vaughan, Sir Gerard


Roe, Mrs Marion
Viggers, Peter


Ross, William (Londonderry E)
Wakeham, Rt Hon John


Rost, Peter
Waldegrave, Rt Hon William


Rowe, Andrew
Walden, George


Rumbold, Rt Hon Mrs Angela
Walker, Bill (T'side North)


Ryder, Rt Hon Richard
Walker, Rt Hon P. (W'cester)


Sackville, Hon Tom
Waller, Gary


Sainsbury, Hon Tim
Walters, Sir Dennis


Sayeed, Jonathan
Ward, John


Scott, Rt Hon Nicholas
Wardle, Charles (Bexhill)


Shaw, David (Dover)
Warren, Kenneth


Shaw, Sir Giles (Pudsey)
Watts, John


Shaw, Sir Michael (Scarb')
Wells, Bowen


Shelton, Sir William
Wheeler, Sir John


Shephard, Mrs G. (Norfolk SW)
Whitney, Ray


Shepherd, Colin (Hereford)
Widdecombe, Ann


Shepherd, Richard (Aldridge)
Wiggin, Jerry


Shersby, Michael
Wilkinson, John


Sims, Roger
Wilshire, David


Skeet, Sir Trevor
Winterton, Mrs Ann


Smith, Sir Dudley (Warwick)
Winterton, Nicholas


Smith, Tim (Beaconsfield)
Wolfson, Mark


Soames, Hon Nicholas
Wood, Timothy


Speller, Tony
Woodcock, Dr. Mike


Spicer, Sir Jim (Dorset W)
Yeo, Tim


Spicer, Michael (S Worcs)
Young, Sir George (Acton)


Squire, Robin
Younger, Rt Hon George


Stanbrook, Ivor



Stanley, Rt Hon Sir John
Tellers for the Noes:


Steen, Anthony
Mr. David Lightbown and


Stern, Michael
Mr. John M. Taylor.

Question accordingly negatived.

It being after Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

Orders of the Day — Mr. Andrew Docherty

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sackville.]

Mr. David Hinchliffe: I am grateful for the opportunity to raise the case of the late Mr. Andrew Docherty. I have two purposes in raising his case. The first is to draw attention to what I and others believe to be clear injustices in the way in which he was treated before his death and the second is to expose the fact that the injustices faced by Mr. Docherty affect many others in similar circumstances, and are a direct consequence of Government policy.
I do not intend to point an accusing finger at individual officials in either the Department of Employment or the Department of Social Security at local level whose actions may have a bearing on Mr. Docherty's case. I am satisfied that in their dealings with Mr. Docherty, which I will describe, they were following to the letter the procedures required of them by present Government policy. As the Minister knows, my criticism and concern are directed at Government policies which had a major bearing on the difficult circumstances faced by this man in the period immediately before his death.
I first met Mr. Docherty, a 32-year-old man who originates from the Hemsworth area, while canvassing in a local government by-election in my constituency during March this year. He raised with me certain personal problems that he was facing and I asked him to come to my regular constituency surgery to discuss matters in more detail.
Mr. Docherty came to see me in April, desperately concerned because he was homeless and had insufficient money with which to feed himself. He told me that he had recently been sacked from his job as a long-distance lorry driver for refusing to drive a defective and dangerous vehicle. He told the police that the vehicle concerned had a virtually bald front nearside tyre and a gash in one of the rear tyres, and that its tachograph was not working. Two days later, he was dismissed and as a consequence of his dismissal, his unemployment benefit was stopped and he received reduced rate income support of, I understand, £23.79 a week.
As he previously spent most of his time living in his cab or in bed-and-breakfast accommodation while he was working, his dismissal meant that he had nowhere to live. His mother and stepfather, who was in poor health, had a two-bedroom house and another relative also resided there. I subsequently established from Mr. Docherty's mother that the other factor preventing him from living at home was the fact that his presence would have had an impact on the family's eligibility for housing benefit and would have resulted in additional poll tax liability which the family simply could not meet. To my knowledge, such considerations have had a major influence on the circumstances of many other homeless people in West Yorkshire and elsewhere.
Mr. Docherty told me that he was sleeping rough either in his car or in a small tent. He expressed concern that he was not getting sufficient sleep to carry out work as a driver, to which he hoped to return shortly.
Following his interview, I wrote an urgent letter about his circumstances to the local housing department, although I recognised that it could be some time before he

received any offers of accommodation. My office is inundated with referrals concerning housing needs and the official figure for homelessness shows an almost 40 per cent. increase over the past two years within Wakefield district. The latest annual report from the Wakefield metropolitan district council housing department states that in terms of homelessness,
the major problem we face is that 30 per cent. of all referrals are from single people and there is simply not enough suitable housing for this client group".
The local authority in Wakefield has a good record on housing. Its voids are less than 1 per cent. and the average property turnround time is within the lowest Audit Commission quartile. Our housing problems stem directly from the fact that the Government have actively prevented replacement of the 9,500 council houses lost through the right to buy. With the exception of the war years, last year was the first since the Labour Government of the 1920s in which no new starts were made on council dwellings in Wakefield.
The consequences of that are only too apparent in cases such as that of Andrew Docherty. After seeing Mr. Docherty I wrote to the manager of the local unemployment benefit office for her comments on the circumstances leading to the suspension of his benefit. She replied promptly on 26 April stating:
When Mr. Docherty claimed benefit he wrote, 'got sack' on his claim form. Our instructions state that we must suspend benefit pending further inquiries to his last employer. We did this. On receipt of the reply from the employer it was stated that Mr. Docherty had been dismissed for misconduct. In these cases we are instructed to refer to the Adjudication Officer for a decision on whether the claim to benefit should be allowed or disallowed.
The claim is currently being considered by the Adjudication Officer who is awaiting a reply from the employer regarding Mr. Docherty's response to their claim that he was dismissed for misconduct. If no reply is received from the employer by I May then the Adjudication Officer will make a decision. If Mr. Docherty's claim for benefit is allowed he will receive the benefit to which he is entitled. If it is disallowed then he will, presumably, continue to receive reduced Income Support for the period of disallowance.
My office was subsequently informed by telephone on 10 May and by a letter dated 13 May from the deputy manager of the unemployment benefit office that Mr. Docherty's case had been allowed by the adjudication officer, and that he was therefore entitled to arrears of benefit. I wrote back to advise them that, unfortunately, Mr. Docherty had committed suicide by inhaling exhaust fumes in his car on the Monkton industrial estate in Wakefield, in my constituency on Saturday 4 May.
I gave the office details of Mr. Docherty's next of kin—his mother in Hemsworth—and said that presumably any outstanding benefit should be paid to her. Given the circumstances of the case, I was surprised and angered to receive a further letter dated 29 May from the deputy benefits manager stating:
Unfortunately it is not the policy of the Department to inform next of kin of any outstanding benefits, the onus is on the individuals concerned to instigate the action.
The Minister is aware that when I received that letter I immediately tabled a question on the matter, and had subsequent correspondence with her fellow Under-Secretary of State, who has been most helpful and concerned. I know that he had hoped to take part in this debate but had to be elsewhere; I pay tribute to the fact that he has shown a personal interest in the case. That is appreciated by me and also, I am sure, by Mr. Docherty's family.
The Minister may wish to refer to our correspondence when she replies to the debate. As she knows, I was far more concerned about the circumstances leading to the suspension of benefit and the effect that that had on Mr. Docherty immediately before his death.
I could substantiate the information that Mr. Docherty gave me through contact with the West Yorkshire metropolitan police. The divisional commander for the Wakefield area informed me in a letter dated 6 September that he could confirm that Mr. Docherty sought the advice of a PC Lingard during March 1991. The letter continued:
According to the officer, Mr. Docherty had been directed to use unroadworthy vehicles belonging to his employers, RT Transport. He was advised that if he did use the vehicle he and his employers may be liable to prosecution. The officer also reports that Mr. Docherty appeared to be aware that if he was dismissed from his employment due to refusing to drive the vehicle, he may have problems regarding his DSS benefits. The officer agreed to confirm the conversation with the Department of Social Security if he was contacted.
The letter continues:
A short time later Mr. Docherty advised PC Lingard that he had been dismissed from his employment and that his claim for benefit had been refused. The officer was also contacted—although two weeks later, by the Department of Social Security and he confirmed details of the conversation.
Bearing in mind the fact that the Departments of Health and of Social Security were advised of Mr. Docherty's complaint to the police before his dismissal, at the time of his initial claim to benefit, it is surely a matter of great concern that his benefit was suspended in the first place, leaving him facing the most difficult financial circumstances on top of his homelessness. The Minister may also wish to elaborate on why it took so long for her Department's officials to contact the police regarding Mr. Docherty's case.
There are additional factors of which I was not aware when I was dealing with Mr. Docherty's case. Apparently, during April and early May, Mr. Docherty had contact with the Wakefield centre for the unemployed, which is based in the same building as my constituency office. The centre, which is mainly funded by the local authority, gives a tremendous amount of support to local people who are facing the trauma of unemployment. The centre's welfare benefits adviser, Mr. Nick Hodgkinson, has advised me that, when Mr. Docherty initially made contact, he had been refused a crisis social fund loan to supplement his weekly income of £23·79. He was actively seeking work as a driver and, in addition to having insufficient money to feed himself, or come anywhere near funding any accommodation, he was having the greatest difficulty in meeting the petrol costs of his car—an essential item in his search for work, in addition to being his home at that stage.
Following advice from the centre for the unemployed, Mr. Docherty successfully obtained a crisis loan of £13·60 from the Department of Social Security. I was astonished to be told by Mr. Hodgkinson that Mr. Docherty was required to repay the loan at the rate of £5·95 per week, leaving him a mere £17·84 on which to live. The centre made a formal written request on his behalf that the repayment should be reduced to £1·98 per week because at that stage its staff were becoming concerned about Mr. Docherty's physical and mental state. After they arranged for him to see a GP, he was prescribed medication and given a sick note which was sent to the Department of

Social Security on 20 April, in the hope that his money would be increased to the full rate of sickness benefit. Nine days later, when Mr. Docherty called again at the centre, his sickness benefit had still not materialised.
During that period, Mr. Docherty depended on cans of food provided by the centre, which he was warming on a small camping stove. On 29 April, the DSS confirmed that a giro for 11 days' sickness benefit would be ready for collection on 2 May, but that a social fund deduction of £5·95 was being made. No decision had been made regarding the request for a reduced repayment rate.
I understand from Mr. Hodgkinson that Mr. Docherty called in again on 1 May, and the centre contacted the DSS adjudication officers in Doncaster regarding the voluntary unemployment investigation. They were informed that there would be the normal delay while the DSS waited for employers to respond to letters, and that it could be up to three or four weeks before a decision was made on his case.
Mr. Docherty's suicide note, which I have with me, was written three days later. It included the words,
I am sorry to everyone concerned.
PS. I asked for help but I got none.
Andrew Docherty was better known to Mr. Hodgkinson than to me, and I feel that it would be appropriate to quote Mr. Hodgkinson's comments in his letter to me on 2 October, because they provide a most appropriate summary of the situation:
It seems that this was a man who worked hard during his adult life, and who was honest enough to lose his job rather than break the law and endanger the lives of other road users, who paid tax and national insurance during his many years' employment, but was unlucky enough to come up against the rules regarding homelessness, which deemed him not vulnerable enough to be given priority status; against the lack of single person's accommodation in Wakefield, which left him sleeping in his car or tent; against the voluntary unemployment investigation procedures which, in effect, hold you guilty until you prove yourself innocent; and against a Social Fund system which insists that people who are accepted as being in crisis are forced to live below the poverty line as they repay the crisis loan.
Mr. Hodgkinson went on to say:
He is not the first and, sadly, will probably not be the last person for whom the trauma of unemployment, homelessness and poverty—none of which could in any way be said to have been caused by any wrong doing on his part—was simply too much.
I have met Mr. Docherty's mother and I pay tribute to the courage that she has shown over the past few months following this bereavement. I hope that lessons can be learnt from Mr. Docherty's case and I look to the Minister to provide his family and many others with some hope arising from what has happened.
A whole range of injustices may have been factors in Mr. Docherty's decision to commit suicide. Clearly, I cannot prove that, but knowing some of the factors, I am sure that they had a bearing on his decision to take his own life.
I urge the Minister to look specifically at three particular issues to arise from Mr. Docherty's case. The first is the plight of the homeless and, in particular, the single homeless. I appreciate that that is not the Minister's direct responsibility, but in her Department she has contact with vast numbers of homeless people and single homeless people through the benefit system. As a result of this debate, I hope that she will make representations to the appropriate Department about the problems facing single homeless people in Wakefield and elsewhere.
Secondly, with regard to Mr. Docherty's case, I draw the Minister's attention to the operation of the crisis loan system which may have added to his problems. It is clear that the burden imposed on Mr. Docherty was unreasonable and the same thing is happening to many other people who face similar problems.
Finally, the main issue that I hope the Minister will address is the automatic assumption in the Government's benefit system that when an employee is dismissed from a job, he or she is assumed to be the guilty party. Mr. Docherty clearly was not the guilty party. I am grateful for the presence tonight of my hon. Friend the Member for Manchester, Withington (Mr. Bradley) who is making his debut on the Opposition Front Bench. My colleagues and I wish him well in his future as a Front-Bench spokesman. I hope that he and the Minister will remember Mr. Docherty's case and will press the Government to do something about such cases.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe): I congratulate the honourable Member for Wakefield (Mr. Hinchliffe) on obtaining this Adjournment debate. The issue that he raised is the tragic case of a man without a home who took his own life after having lost his job. I extend the condolences both of myself and of my hon. Friend the Parliamentary Under-Secretary of State for Social Security, the hon. Member for Fylde (Mr. Jack), to the family at this difficult time. I was grateful to the hon. Gentleman for stating that he did not feel that the staff at our local offices were in any way to blame for this tragic sequence of events. He has rightly pointed out that they were obeying the rules as they stand and it is to those rules that I wish to address the bulk of my remarks.
I was also grateful to the hon. Gentleman for his kind comments about my hon. Friend the Parliamentary Under-Secretary of State, who has taken a deep personal interest in this case, and he sends his apologies to both the hon. Member for Wakefield and to the House for his unavoidable absence this evening. He is abroad on ministerial business.
The hon. Gentleman has two criticisms of my Department. First, he criticises what may be described as a presumption of guilt in determining unemployment benefit where there is a question of voluntary unemployment. Secondly, he criticises failure to inform relatives where a deceased person is entitled to arrears of benefit. He has also raised the subject of social fund loans and their recovery.
I shall deal with the events in the local offices of the Employment Service and the Benefits Agency between 11 March 1991, when Mr. Docherty made his first claim to unemployment benefit, and 3 May 1991, when the adjudication officer decided that Mr. Docherty was not disqualified for receiving unemployment benefit.
Perhaps at this point I should say, in response to the hon. Gentleman's description of the circumstances which surrounded Mr. Docherty becoming unemployed in March, that it is indeed, regrettable that that man appears to have been offered a decision between safety and employment, although the facts of the matter I have not established. However, if the hon. Gentleman's description

of the circumstances is accurate, perhaps the employer in question would also wish to reflect on the lessons of this case.
The decision by the independent statutory authority that Mr. Docherty was not disqualified for receiving unemployment benefit was made after Mr. Docherty had claimed sickness benefit on 25 April. It was also made on the day preceding that on which he so tragically took his own life.
When Mr. Docherty, a divorced man of 33, made his claim to unemployment benefit he gave his occupation as a heavy goods vehicle driver. In a statement on why his job had ended on 9 March, he said that he had been sacked. That answer clearly raised the question whether Mr. Docherty had lost his employment through his misconduct. The local office wrote to his last employer, R T Transport of Wombwell, Barnsley, seeking information on the circumstances of the dismissal. The employer's reply was received on 19 March.
The question was then referred, quite properly and in accordance with normal procedures, by the local office of the Employment Service to the adjudication officer for a decision. The Social Security Act 1975 requires any such question arising in connection with a claim for benefit to be submitted forthwith to an adjudication officer. In this case, the reference was made on 21 March, two days after the reply had been received at the local office. I hope, therefore, that it will be accepted that local officials acted with all necessary dispatch.
Again in accordance with normal practice, the adjudication officer invited Mr. Docherty to comment on the statement from his late employers. Having no fixed address, he did not make his response to the statement until he next attended the local office on 11 April. His comments conflicted with the information given by the employers and the adjudication officer directed that R. T. Transport should be given the opportunity to see Mr. Docherty's further statement. The adjudication officer did not receive an early reply from the employers and decided that he would make a decision if he still did not receive their reply by 1 May.
On 3 May, the adjudication officer gave his decision to the effect that Mr. Docherty was not disqualified on the grounds referred. When that decision was received by the Employment Service, it was passed immediately to the connected local office of the Benefits Agency where the calculation was made of the arrears of income support due. Those amounted to £44·13 and arrangements were made to ensure that the payment was ready for Mr. Docherty when he next attended the local office.
Mr. Docherty received income support payments covering his entitlement from the date of his initial claim to unemployment benefit until he claimed sickness benefit on 25 April. He received £28·29 on 21 March and £44 on 4 April. He then received £62·80 in respect of the period of 3 April to 21 April and a further £6·80 on 23 April. On 29 April, he received £45·47. Because he had no fixed address, he collected his benefit personally. That continued until he claimed sickness benefit. The Employment Service office was unaware that Mr. Docherty had committed suicide until the hon. Gentleman's letter of 23 May was received by the manager.
I now refer to the presumption of guilt.

Mr. Hinchliffe: Has the Minister seen a copy of a letter that was sent to me on 7 October by the deputy manager


of the Employment Service office in Wakefield, stating the income support payments made to Mr. Docherty? The figures that I have been given conflict with those that the hon. Lady has given.

Miss Widdecombe: There is a further conflict in respect of the social fund. I have indeed seen a copy of the letter. My information is documented information from the local office. If the hon. Gentleman wishes to pursue that point after the debate, I suggest that we correspond or meet on the issue. I shall be very happy to resolve any differences.
The hon. Gentleman will be aware that it is a principle underlying the payment of benefits to the unemployed that the lack of employment should not be attributable in any way to the actions or choices of the claimant. Disqualification under the national insurance scheme is intended as a recognition of the basic principle that a person can be insured only against events for which he or she is not personally responsible. Any disqualification for the receipt of unemployment benefit is met with a corresponding reduction in the rate of income support. The principle of paying a reduced benefit rate until a decision on disqualification has been reached by the independent statutory authorities has been followed by both Labour and Conservative Governments.
Mr. Docherty stated that he had been sacked. If claimants making such declarations were paid their full income support entitlement pending the adjudication officer's decision, we would probably be faced with substantial unrecoverable debts. The hon. Member will, I am sure, be aware of the many difficulties that face us in recovering overpayments in the normal course of events. To enable us to cover these debts, with safeguards built in, would require a major change in primary legislation. I am not convinced that there is a sufficient case for us to depart from the principle that has been adhered to by successive Governments.
Although I am not able to offer the hon. Gentleman any prospect of change in terms of voluntary unemployment deductions, it is perhaps worth pointing out that the 40 per cent. of the personal rate of benefit which is removed while inquiries proceed is modified to 20 per cent. if any member of the family is pregnant or seriously ill and if the family has less than £200 capital. No reduction is applied to benefit payable in respect of dependants. There is, therefore, a policy of trying to protect the most vulnerable.
However, the hon. Gentleman's second point has brought action from my Department. My hon. Friend the Member for Fylde wrote to the hon. Gentleman on 10 June thanking him for bringing to his attention the omission in the procedural instructions issued to local officers. It is more regrettable—and is profoundly regretted—that when notified of Mr. Docherty's death, the local office staff did not have instructions before them which ensured a sympathetic approach to the question of the payment of arrears to those who had just suffered the loss of a relative. My hon. Friend expressed his sympathies to Mr. Docherty's family and passed on assurances from the Employment Service that an invitation to claim arrears

of benefit will be issued to a legal personal representative or next of kin where either, or a third party, notifies the Employment Service that the claimant has died.
I am pleased to tell the House that the Employment Service has now issued new instructions to that effect to everyone in its offices and has made managers responsible for inviting claims for any outstanding benefit. The new instruction emphasises that, when inviting such a claim, discretion must be used to ensure that no further distress is caused to relatives. The instructions arise directly as a result of this tragic case and I hope that they will act as some reassurance to the hon. Gentleman that the treatment which Mr. Docherty's relatives received will not recur. I join my hon. Friend the Member for Fylde in expressing sincere regret for the additional distress which must have been caused by the original absence of such directions.
I turn to the applications made by Mr. Docherty to the social fund. He applied for a crisis loan on 27 March as his fortnightly payment of income support was not due until 4 April. He was paid £28·09 and agreed to repay the loan at the weekly rate of £5·51. I should say at this point that it was open to Mr. Docherty, as it is to any applicant for a crisis loan, to negotiate a lower rate of repayment, particularly if it is likely to cause difficulties at the rate set. In this case, recovery did not commence until 29 April—a month later—by which time Mr. Docherty had left the unemployment register and was receiving income support at the full rate while sick.
Further crisis loans were made on 11 April and 24 April, when the social fund officer decided that Mr. Docherty's personal circumstances were such that these were appropriate. The weekly recovery rate of £5·95 was deferred until the earlier loan had been paid off. Clearly then, Mr. Docherty benefited from the fact that the social fund is a flexible scheme and he was able to use it to mitigate the effects of his reduced benefits.
As the hon. Gentleman said, a letter was received from the Wakefield centre for the unemployed, requesting a change in the rate of recovery. Had Mr. Docherty lived, this would have been discussed with him and a revised rate of recovery would have been considered in the light of his circumstances.
Finally, the hon. Gentleman has drawn attention to the fact that Mr. Docherty was homeless and searching for accommodation at the time of his death. I know that the hon. Gentleman was assisting him with an application for local authority housing. Homelessness is a complex problem about which the Government as a whole are seriously concerned and the hon. Gentleman will be aware that the Department of the Environment has been taking a number of initiatives. I shall, of course, draw to that Department's attention the situation that the hon. Gentleman has described and shall ensure that it fully understands his comments and concerns on this matter.

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eleven minutes to Eleven o'clock.